§
The noble Lord said: Before coming to Amendment No. 1 perhaps it would be appropriate for us to say how delighted we are to see that the Government have called up the 1980 reserves in the form of the noble Earl, Lord Gowrie. We are particularly happy to welcome him back because I know that, from that experience in the 1980 Bill, he will recognise as we go through this Bill the customary moderation of our amendments in the light of a Bill which, even more than in 1980, appears to be irredeemable in its iniquity.

§
We begin with an amendment which is indeed a modest amendment, and one which I think I would be genuinely sorry to see the Government totally resist. The schedule and the clause that open the Bill give to the Secretary of State some of the most extravagant powers which a Minister has had in recent times to dispense, in his entire discretion, public money. It gives him the power to distribute, it is estimated, up to£2 million among persons who were dismissed from employment between 1974 and 1980, on the basis that if the Government's Act of 1980 had been in force at the time, and if he takes the view that they might have had a remedy under its provisions, then he can pay them
664
any amount that he sees fit within certain broad limits in the schedule.

§
In another place there was considerable debate about whether this was retrospective or retroactive legislation, but I do not think your Lordships will be interested in that semantic discussion; it is perhaps sensible to call it a retroactive statutory discretion, and it certainly falls within the classical description of the retroactive and retrospective provisions of Mr. Justice Willes in 1870, when he spoke of laws that change the character of past transactions carried on upon the faith of the then existing law. It changes the character of the past transaction and it puts the Secretary of State in broadly the same sort of place as an industrial tribunal would be in if it faced a case which had occurred between two and eight years ago.

§
We shall argue in the debates on these clauses that there is no obligation whatever on the Government to introduce legislation as wide as that for the past, or indeed in respect of what they have already, and certainly not in this Bill for the future on union membership arrangements: and we shall on the appropriate amendments look in detail at the judgment of the Court of Human Rights at Strasbourg on which the Government have placed a certain reliance. But they cannot rely on that judgment for the extravagant provisions in these two provisions which do not include —and this is the point of our amendment—any provision whatever for the Secretary of State to make public what he is doing. The burden of the amendment is only to say that, if we fail in all else, the Secretary of State must tell us what he is doing with this money.

§
Clause 1 and Schedule 1 of the Bill are very different from the rest of it. The subject was not mentioned in the consultative proposals; nobody heard a word of this desire to make retroactive payments until the Bill sprang, as it were, like Athene fully armed from the unencumbered head of the Secretary of State after the consultative proposals. Employees who assert their rights to claim unfair dismissal under legislation normally do so openly in a tribunal. Industrial tribunals rarely sit in camera, and there is no suggestion in the Bill that they should sit in camera more than they do now.

§
Here, however, the Secretary of State may appoint an assessor, but he is not bound to take the assessor's judgment on fact or law—that is explicitly provided for in the schedule—and he can decide the exact amount of compensation. The amendment says that he must tell us what he does before he actually distributes the money, and in the amendment we provide for a period of three weeks, which seems to us reasonable. There is surely a very strong case for this House to look at this sort of provision.

§
It is frequently said that retrospective or retroactive legislation is bad, but I shall not stand here and suggest that either side does not from time to time initiate retroactive or retrospective legislation. All Governments do it from time to time. What I say however is that if it is done, it should be scrutinised with the closest attention. And if it is done, it should not allow for very important powers, and the expenditure of public money, in secret in a way that cannot be known about.

§
What have the Government said so far? I will take briefly the six points they made in another place.

§
Most of them come from the Under-Secretary of State on 11th March, in columns 267 onwards, in Standing Committee, and I summarise the points, I hope fairly. First, the Minister said that it would be a waste of public money to present such reports. Secondly, he said it was undesirable because it would infringe the privacy of the transactions between Government and individual. I pause here to say that since this individual, had he had the rights at the time, would have had to sue in public in tribunal, what worth can be put on that argument?

§
He said, thirdly, that it was wrong to disclose the names of employers and unions involved—this does of course involve a dismissal from a closed shop situation and there must be a UMA, a union membership arrangement, between an employer and a union—because it would look as though, said the Under-Secretary, the unions and employers were being put in the dock. I do not believe that for a moment. It was agreed that answers might be given to parliamentary Questions, although it is not at all clear what would be said, and perhaps the noble Earl, Lord Gowrie, would tell us what would be said if a Question were put down about a particular case. Then it was said that these decisions to pay compensation were different from industrial tribunal decisions because the Secretary of State was exercising a discretion.

§
Then it was said, and as it is so important I will quote the words:
I may have misread the press, but I understand that the trade union movement has recently been issuing threats to take action against people who try to benefit by taking such action as the Bill made available to them. Perhaps I did not understand what appeared in the press, but if I have understood it aright, those people were saying, quite irresponsibly, that what Parliament will decide to do, they will do their best to obstruct and frustrate".
He was challenged on that, and on a number of occasions afterwards, to produce evidence for it, and he produced none; and I trust the Government will make it clear that they know of no such threats—because there are none—or else produce evidence of them.

§
It is even worse than that because if such threats had been made by someone irresponsible enough to do so—of penalising somebody for exercising his legal rights the man would be in the same position as if he had sued in an industrial tribunal. If the trade union movement wants to go around penalising people for exercising their rights under the legislation, they can get the names of those who do so in the tribunals, but I know of no one case where that has been done, and if there is one let the Government produce it, as a straight answer to an action in a tribunal.

§
Surely none of this is an answer to the plea that the Secretary of State should say what he is doing, for here there is no appeal to a court; there is no appeal to the employment appeal tribunal. It may be that a claimant could go to the High Court on judicial review if the Secretary of State was so erroneous in an extravagant manner and got his law all wrong, but that would be a very rare case.

§
A point of the greatest importance, one to which we shall return in our debates—it is right that I should raise it at an early point because I know that my noble friend Lord McCarthy will have something to say on it—is that the Government, at the beginning, estimated that they needed £2 million to dispense on the clause
666
because they thought there would be some 400 cases of injustice that might need recompensing of those dismissed between 1974 and 1980. Your Lordships will appreciate that I am not at the moment debating the type of injustice, because that is not relevant to the amendment, although I would and shall on other amendments.

§
The Government said they based the 400 estimate-or, as the Minister of State said, "the shot in the dark of 400"—on the research of Miss Helen Jackson and, secondly, a research team commissioned by the Department of Employment three years ago which is now co-ordinated by Professor Gennard of the University of Strathclyde. There is a nice irony in this because Miss Jackson's research (which is normally understood to be a guess, which is what it was, of 400 cases) was punctured by Professor Gennard and his team in a letter to the New Statesman in June 1980, and little has been heard of her research methods since. Since then, however, the dark in which the shot was made has become even more gloomy. The Gennard Report is well known in various circles to be around in final draft form, but the Government will not publish it. They say it is unfinished and they cannot publish it. The Secretary of State repeatedly refused to disclose the report in another place, even though his Minister of State said in Committee on 11th March, at column 218:
Those drafts"—
that is, drafts of the Gennard Report—
are now and have been for some time the subject of discussion and detailed examination normal in commissioned research, but it is not finished".
I do not wish to challenge that, but I say that it has been challenged. The Financial Times is not normally an irresponsible newspaper. On 24th May, in a report by John Lloyd and David Goodhart, its labour correspondents, it stated:
Employment Ministers say 'The report has not been published because it is unfinished '. That is only technically correct. The report is completed, but it has not yet been formally accepted by the department. Until it is, it cannot be published".

§
Then, suddenly, also in Committee in another place, the Government decided to make a concession, and they handed across a two-page document which gave some of the figures from the Gennard Report, presumably upon which they were relying. The document showed that there were fewer that 400 such dismissals over a much longer period, and it was not at all clear which would fall within the schedule and which would not. Various persons, including the general secretary of the Trades Union Congress, have asked the Government for the report, and to my knowledge have not yet received it. Even if the report is only a draft, when it is known by everyone who knows anything about it—there have been extensive press leaks, and every labour correspondent has a copy—it is quite wrong for Parliament to be asked to debate the spending of £2 million worth of public money by shots in the dark when the window could be opened and the light from Gennard could stream in to infuse the debate with some knowledge and clarity.

§
I hope that the Government will anounce that they will release the report, especially in view of the fact that on 9th December 1975 a Back-Bencher in another place spoke about the need for the press to be present
667
and to have publicity in all kinds of tribunals. That Back-Bencher is now the Secretary of State for Employment, Mr. Norman Tebbit. In a glorious speech, reported at col. 335 of the Official Report—this is my final quotation; I shall not quote all of the speech—he said that the press must be there, the plaintiff must be represented, everything must be done in the open. He is right. He was right then, and he ought to be right now. It is because of that fundamental, very simple and very modest point, which goes to the root of the way in which the Government have so far handled the matter, that I beg to move the amendment.

It is refreshing to begin the Committee stage of the Bill with an effort, an unaccustomed effort, on the part of the Opposition Front Bench to press for restraint and control over public expenditure. I only hope that on other measures the noble Lord, Lord Wedderburn of Charlton, will infect his colleagues with similar zeal, perhaps in cases where more public money is involved and where the merits of the expenditure are less obvious than they are in this case. The noble Lord on the Front Bench opposite exercised all his impressive forensic abilities to try to turn this really rather modest matter into a major issue of principle and of policy. But what the amendment that I think he was moving seeks to do is simply to provide paving for a number of subsequent amendments which would formalise, delay, and prolong matters and would involve considerable additional administrative expenditure in respect of the fairly simple and straightforward issue dealt with by Clause 1.

As I understand it, Clause 1 simply seeks to remedy what I think the noble Lord opposite will find the great bulk of public opinion in this country regards as a very real wrong suffered by a limited number of people who lost their jobs as a result of an unfair state of affairs. That opinion is held not only by some of us on these Benches; it is also the opinion of the European Court of Human Rights, the impartiality of which in the political sense is I think beyond dispute. After a prolonged discussion of the matter, the court held that in some of the cases there was a breach of fundamental human rights. The clause is designed to put that right, and on any view the amounts involved are moderate. It is a once-and-for-all proposal.

On the whole I share the dislike of the noble Lord opposite for legislation which is either retroactive or retrospective, but where, as in this case, the sole retroactive effect is to confer a benefit, the normal objections do not arise. It is objectionable to alter the law retrospectively where people who have acted under the law as they thought it was, find it altered subsequently to their disadvantage. That is not the case with this proposal. An advantage, a modest advantage, by way of recompense is conferred on people who have suffered wrong and injustice. I see no reason whatever for setting up, as is proposed by noble Lords opposite, an elaborate piece of machinery the only effect of which can be to spend further public money on administraton and to delay the payment to people who suffered their wrongs some years ago.

Finally, the noble Lord was I think for once guilty of something of an inaccuracy when he said that my
668
right honourable friend the Secretary of State would spend the money in secret. I speak subject to confirmation by my noble friend on the Front Bench, but it would be my impression that the expenditure would be subject to review by the Comptroller and Auditor General, and if he found any irregularity, abuse of power or excess of action the matter would be reported to the Public Accounts Committee. Those of us in this Chamber who have had the privilege of serving on that committee know what effective sanction and control it provides. Not for one moment do I think that there is the slightest likelihood of any irregularity, but I agree with the noble Lord opposite that if there were to be, since public money is involved, there should be some protection. Speaking subject to my noble friend's confirmation, I believe that there is the normal protection provided by the audit of the Comptroller and Auditor General and by examination by the Public Accounts Committee. Therefore, I hope that, without undue delay, your Lordships' Committee will reject the amendment.

Before the noble Lord sits down I wish to apologise to him and to your Lordships. The noble Lord said that he was not sure which amendment I was moving. If your Lordships will permit me to point out, I should have said at the onset that, with your Lordships' approval, I wished Amendment No. 3 to be taken with Amendment No. 1,because they go together.

At Second Reading I made plain that we on these Benches support in principle the Secretary of State being empowered to compenstate the individuals to whom the noble Lord, Lord Wedderburn of Charlton, has referred. However, on the face of it to us it seems reasonable that when the Secretary of State is taking powers to disburse what are potentially large sums of money—I think that on this point I cannot agree with the noble Lord, Lord Boyd-Carpenter—without reference to industrial tribunals that are available for the purpose, or even without necessarily having to consult anyone else, then, as the amendment proposes, there should at least be some obligation on him to give reasons for the decision that he has reached and to publish any report that might have been made by the person appointed by him under Schedule 1. While there might be doubt as to the practicality of ascertaining, as is suggested in the next amendment, the opinion of the former employer and the trade union which may earlier have been involved, I have considerable sympathy with the principle that the Secretary of State should be made more accountable for the decisions that he makes in this matter.

I should like to raise a point, a narrower point, but one which I should have thought would be dear to the hearts of members of the Front Bench opposite. In the reference in the Explanatory and Financial Memorandum of the Bill to the amount of public money to be spent it is stated that it is proposed to pay out up to £2 million. It is then stated that it will cost a quarter of a million pounds to pay out £2 million. That seems to be an enormously high
669
administrative cost for the paying out of £2 million. Do we really have to spend all that money to dish out £2 million?

These amendments and the clause to which they relate are likely to become a feature of our political and parliamentary life if the see-saw trends of recent affairs continue. It seems now as if one Government propose and the next one dispose, and one wonders whether we are entering a period of politics in which Governments will have a single term and probably no longer, in which case the succession of Governments will be involved in undoing what their predecessors did.

I am not in sympathy with these amendments, and I am not really in sympathy with the clause either, because this is another move in the see-saw politics to which I object. Nothing seems to stick, and I do not see how we can continue to govern this country on the basis of doing and undoing. It used to stop at doing and undoing, but now we have retroactive or retrospective measures to repair the harm done by the previous legislation. The Labour Government, when they came to dismantle the 1971 Industrial Relations Act, made retrospective the tax relief on the income of funds of trade unions which registration under the 1971 Act qualified them for but which non-registration did not: and from recollection, I believe £10 million was provided to restore to the trade unions the tax relief that they had foregone, and knowingly foregone, because of non-registration under the 1971 Act.

Call it what you like, it was a retrospective repair of harm alleged to have been done under the earlier legislation—and this, in principle, is precisely the same, with, I regret to say, the same political bias behind it in both cases. This is not really the repairing of an obvious harm to individuals which public opinion generally feels should be put right. There is a political bias both ways when one comes to deal with matters of this kind, because they arise from a highly political piece of legislation, whether it is the 1971 Act, the 1974 Act, the 1976 Act, the 1980 Act or the 1982 Act. They are all highly political, and arouse deep feelings and emotions, extreme bitterness and grave exaggeration in all criticisms of them from both sides. There are, of course, some differences here, but the retrospection provided for the refund of tax reliefs foregone was based upon an assessment of what relief was due, and it was easily ascertainable; it was not, so to speak, at anybody's discretion. But under the proposals here, payments are within limits within the discretion of the Secretary of State.

My sympathy in this matter certainly rests with workers who found themselves dismissed on account of the introduction of a closed shop arrangement, who had never undertaken to join a union, who had never done so and whose employment was never conditional upon their being members of any trade union of or a particular union. They exercised the freedom of the citizen to not join a union if they so decided. To alter the conditions of their employment and to turf them out is, I think, a grievous wrong on individuals; and, furthermore, I do not think that people who take that stand are necessarily dishonourable people. The dissenter is often a very noble person indeed, and a very courageous one, who places individual liberty above all
670
else. Others of more temperate outlook on life decide that one stand for liberty has to be reconciled with another, and by that means compromise is brought about. But we must not feel that there is necessarily a justifiable bias against those who may claim the payments that can be made under this clause.

That is why I am very much out of sympathy with the proposal to publish their names and to publish the reports that are made upon their applications. It may be, of course, that some of them have already had publicity before an industrial tribunal, because they may have failed in their claim for wrongful dismissal. Some may have decided that it was not worthwhile making a claim, and may not have received any publicity so far. But I think the Secretary of State will obviously account for what he is doing, in the sense that he will provide an analysis of the payments he has made and the numbers involved, and all the desirable details about what he has done. But what is the point of publication of names? It is to put them in the pillory. That, I fear, is what would happen to them, and that is extremely undesirable. I do not feel that one should victimise people who avail themselves of this opportunity to get compensation retrospectively merely because they were excluded from continued employment in their particular jobs.

I therefore feel that Parliament ought to look at where we are going on this kind of legislation, and ask ourselves whether the public are going to continue to have patience indefinitely with this feature of our political and parliamentary activity. I think it is taking up an enormous amount of time. There are much more important things in this Bill than this. The discretion has to go somewhere. The industrial tribunals are usually awarding against employers and not against the state; they are not spending public money, so the discretion has to go somewhere. It could all go to one tribunal. I think it is undesirable to have this scattered all over the country in different industrial tribunals which may have a different approach to this kind of case and which they are not used to hearing retrospectively in this particular way.

So I regret to say that I do not feel that I can go along with these amendments. In so doing, I do not think I need to repeat time and time again my own connection with the trade union movement; but while my own union had a 93 per cent. membership on a voluntary basis, I saw no reason for a closed shop. It really makes the leadership lazy, arrogant and sometimes aggressive towards members, who are captive members and whose confidence and goodwill they do not rely on for their continued strength as union leaders. But that is a debate for another occasion. I am sorry to introduce a dissenting note at this stage, so early in the debates on this Bill, but one has to decide: does one say nothing and let it go, or does one feel that there is something to be said in principle on a matter of this kind? I feel there is, and that is why I have said it.

I do not intend to follow the line of argument pursued by my noble friend Lord Houghton of Sowerby, although it will be no great suprise to those who know me that I agree very much with many of the things that he has said. I want to revert, and to revert very briefly, to the arguments
671
raised in defence of the Government by the noble Lord, Lord Boyd-Carpenter, or at any rate to these arguments in so far as I understand them—and any misunderstanding will have been due to me and not to the noble Lord, whose clarity of expression is legendary in your Lordships' House and elsewhere.

As I understand it, the noble Lord, Lord Boyd-Carpenter, appeared to me to defend the Government against the allegation of secrecy by referring to the position of the Auditor-General and of the Public Accounts Committee. What he said was right. What the Government do with money comes under the scrutiny of the Auditor-General and whatever comes under the scrutiny of the Auditor-General comes within the purview of the Public Accounts Committee, a body of which he has great experience and I have none, so that he speaks as an insider and I as an outsider.

I would remind him (and he will correct me if I am wrong) that the work of the Auditor-General, consequently and the work of the Public Accounts Committee, covers a vast field. In the nature of things, the Public Accounts Committee does not deal with everything which might theoretically come within its ambit. While it might be true that the Public Accounts Committee could theoretically deal with this particular aspect of public expenditure, it is not necessarily true that the Public Accounts Committee would do so.

Perhaps the noble Lord will allow me to intervene. As I understand it, the position is that the Comptroller and Auditor-General and the Exchequer Audit Department with their staff of between 400 and 500 are working through the departments throughout the year. Of course, a great deal of what they ascertain never comes before the Public Accounts Committee, but any irregularity, any making of payments which should not have been made, even though the amounts are small, they would normally find it necessary to draw to the attention of the committee and the committee would feel it its duty to deal with it.

I am sure that the noble Lord because of his experience is correct. Nevertheless, it remains true that the amount of work for the Public Accounts Committee is such that they will always give greater or lesser weight to each of a variety of items which comes before them. It might be that this area of expenditure is something upon which they might feel inclined to spend a lot of time, but I am sure that the noble Lord will agree with me that it may not be so. There may be from year to year a wide variety of items of Government expenditure which the Public Accounts Committee would find much more important and pressing and would deal with rather than this kind of thing. I think that the argument which the noble Lord, Lord Boyd-Carpenter, raised was a strong one, but I do not think it was strong enough, and because it was not strong enough I think the Committee should pay very careful attention to these amendments before us now.

Lord Oram

Neither my noble friend Lord
672
Wedderburn of Charlton nor the noble Lord, Lord Boyd-Carpenter, found very much objection to the fact that the scheme proposed in Clause 1 is retroactive or retrospective. And neither do I. I agree that both sides of this House pass retroactive legislation and I see no particular objection, in that sense, to that part of this clause. But I would suggest that it is uniquely retrospective, and perhaps dangerously so, in that it requires a decision to be made in respect of events of an earlier period, perhaps of six, seven or eight years ago, on the assumption that the 1980 Act had been in existence years before it actually was enacted.

There may be precedents for this kind of thing but I am not aware of them. I believe it to be true that this clause is unique in that respect. Certainly it would raise enormous practical difficulties in operation. It would put great strain upon the impartiality of those whose duty it is to reach decisions, and to reach proper and fair decisions, in the cases that will come before them. Because this amendment that my noble friend has moved would help to deal with that difficult task, and would ensure that each case was more deliberately and carefully examined in the face of the enormous difficulties to which I have referred, I think this amendment should commend itself to your Lordships.

I support this amendment wholeheartedly. There is no question of delay with this amendment. It turns the searchlight of democracy on this issue. We are voting on this issue but we do not know how many cases will be involved. The sum of £2 million is set aside but there has been no authoritative statement yet from the Benches opposite as to how many cases they expect. I do not think they know. We want to know not only the number of cases but how the Secretary of State will deal with them. It is all right for us to pass a Bill or to amend a Bill and not take into account that the media will turn their searchlight on issues of this kind. If we think that the people who are going to receive monies from the Secretary of State will keep it quiet, I do not think we understand the ingenuity of the press.

There is an emotive issue here for 12 million trade unionists. This is a benefit for non-members, for people who refused to join a trade union. They are the bounty hunters and the Government are taking pride in giving money to non-members, money to people who were too mean to belong to a trade union. I disagree on this with my noble friend Lord Houghton, who was predecessor as Chairman of the Inland Revenue Staff Association for 40 years; I was general secretary for 16 years. I think that we have to understand the feelings of those trade unionists who have paid their dues and fought the battles with the employers and got benefits which the non-members have accepted. Now they see these non-members being remunerated and benefited by the Government.

Therefore, I think we ought to have the searchlight of democracy on this issue. And that is why I want to see reports made and names published. I do not think that many people will be too ashamed to have their names published if there is some brass at the end of it. I, too, will be influenced to some extent by what the Government will be able to say about the Comptroller and Auditor-General. I think this is an important point which the noble Lord, Lord Boyd
673
Carpenter, raised. We do not know at the moment whether it is going to be looked at carefully by the Comptroller and Auditor-General or by the Public Accounts Committee. However, I support the amendment.

May I make a few remarks backing up what my noble friend Lord Boyd-Carpenter said earlier, which I hope noble Lords are not forgetting, for we have since had these long statements. All this amendment will do will be to complicate things and slow them down. The sooner they are dealt with, the better. They are perfectly legitimate; the Court of Human Rights said so in particular cases. There are others which are similar; but I believe but there are not too many altogether. It is right, as the noble Lord, Lord Houghton, has said, that publicity for this for individuals is probably undesirable. There is no reason why, if they themselves want to make it public, they should not do so; but it should not be forced upon them from without. I would have thought it was quite an important point, and the sooner it is dealt with fairly and straightforwardly the better. As my noble friend Lord Boyd-Carpenter pointed out, there is ample machinery within the system to make sure that the Secretary of State does not abuse his powers in this respect. Therefore, I would have thought that this complicated amendment is better rejected by your Lordships.

May I draw the attention of the noble Lords, Lord Boyd-Carpenter and Lord Mottistone, to the speech just made by my noble friend Lord Plant, and also to the opening speech of the noble Lord, Lord Wedderburn of Charlton. The argument that is being put by the noble Lord, Lord Boyd-Carpenter, with some support from the noble Lord, Lord Mottistone, is irrelevant to this amendment. The question is not whether the Public Accounts Committee will find irregularities: that is not the object of it at all. The object of the amendment is to make public what the Secretary of State is doing, and if the Secretary of State is handing out up to£2 million of public money, I would have thought that anybody who believes in open government, in democratic government and, as my noble friend Lord Wedderburn quoted from the Secretary of State himself, public accountability, would support this amendment.

The object of the amendment is for the country to see what the Secretary of State is doing. If the Secretary of State is going to hand out this money, he must be seen to be doing it according to certian criteria, and those criteria should be published and made known. All I would say to my noble friend Lord Houghton of Sowerby is that if the figures that have been bandied about in Standing Committee and in another place and during the Committee stage in another place, are correct, and if in fact the people we are referring to—300 to 400 people—are going to get something of the order of £20,000 to£30.000, then I very much doubt whether they would be too much worried about their names being publicised. It rather reminds one of putting a cross on the football pool coupon—" no publicity, please."

674
The essential element of Amendments 1 and 3 is the issue of public accountability. Do not let us get misled into the fields of the Public Accounts Committee and the searching for irregularities. We are talking here about public accountability of a member of the Government. Surely that is what Parliament is about. Surely, when a Secretary of State is asking for powers to distribute money in this way, whether we agree with it or not, the first thing we should insist on is that he is accountable to Parliament and to the public for the way in which he spends that money and the criteria he uses to distribute it.

Listening to debates in your Lordships' Chamber, one gains experience all the time. I came into the Chamber today believing that in general terms and in general principle, retroactive and retrospective legislation was obnoxious in the extreme. I still believe that, and I do not think it has anything to do with fair play, with justice, or with any of the other words that have been used. In the main it is purely punitive and it is in that spirit that I believe it is being operated in this case. But in case my words may be misunderstood, I take inspiration for I am encouraged that in future debates we shall have the support of the noble Lords, Lord Boyd-Carpenter and Lord Houghton of Sowerby, when we introduce further retroactive legislation to make these people pay back this amount of£2 million they have already received, wrongly, in my view. I am sure we shall receive their support in that regard.

The only other point I should like to make concerns the remark of the noble Lord, Lord Houghton, about the closed shop. He said he would never support it so long as he had 93 per cent. members by so-called voluntary means. That is all right when you have a sympathetic employer. However, most employers are not sympathetic. They recognise a trade union only when that trade union is strong enough to compel that recognition, and if action is taken to operate even fundamental rights—the right to refuse to work with a non-unionist, which is an elementary right enshrined for many, many years —we shall be committing an offence when this Bill takes effect. Therefore, in my view, there is no question of some impartial way in which these things can be brought about unless you have a sympathetic employer; and unfortunately that is not the case in Britain today.

I never thought, when I took part in the debates on the Industrial Relations Bill in 1970 and 1971, that I would ever be involved again: I suffered enough. But as I understand the subject of this debate—I have some difficulty in following it—it appears to me to be somewhat complicated, and I am a little out of touch with these matters nowadays. But if I understand the kernel of the subject aright, it relates merely to a matter of publicity. Should the activities, whatever they may be, arising out of legislation be made public? That is all. It is merely a question of whether there should be publicity for an action taken on behalf of the Secretary of State or by himself directly, or whether there should be no publicity whatever. That is what I understand the debate to be about.

675
I am bound to say just this: if it were another Secretary of State I would not worry so much about it, but one must have in view his obvious bias and partiality, and his determination to weaken the trade union movement. There is no question about that. There is one thing to be said for the Secretary of State: he conceals nothing about his innermost feelings and sentiments. He is the kind of Secretary of State I like. You can deal with him. I would rather have that kind of Secretary of State than somebody who withholds from the general public, and certainly from Members of your Lordships' House and those of another place, what he is up to.

I think it would be interesting to know what he is up to in almost every particular of his activities. It would be very interesting and therefore, if the subject or, as I say, the kernel of this debate is a matter of publicity as to whether his activities in this particular area should he made known, and, especially as regards the expenditure of money, whether on behalf of the Government or on behalf of employers, should be revealed, I hope this amendment will be accepted.

I understand that the noble Earl, Lord Ferrers, is to reply. We all know his humanitarian instincts—they have been made known to us on many occasions—and I am certain that he would be the last man in your Lordships' House to try to conceal anything. Here is his opportunity. This democrat, this noble democrat, this aristocratic democrat—you cannot get a better democrat than that. If there is one, I should like to know about him. I would write an article about him and make a hit of money from that. But I do not want to be involved in these matters for very much longer. You get a bit out of touch when you get a bit older and, in the course of a few years, I shall be getting a bit older. It seems to me that I had better keep out of these disputes. But as this one appears to me, it is a simple issue—a matter of publicity. I am all for publicity. I hope that the noble Earl will respond accordingly.

Earl Ferrers

Before I come to that inviting and touching subject to which the noble Lord, Lord Shinwell, has referred, may I respond to the courteous welcome which the noble Lord, Lord Wedderburn, gave to my noble friend Lord Gowrie. He said that we had brought up the 1980 reserves and he was glad to see it. We were merely responding to the cry of noble Lords opposite on Second Reading to "Bring back Gowrie". As I told him then, he is as welcome on this Front Bench on this occasion as noble Lords opposite will find him welcome to them.

I think that we have got slightly off the main beam of the amendment, because this seems almost to have turned into a clause stand part debate. The noble Lord, Lord Wedderburn, said at the start that this Bill was irredeemable in its iniquity. I am sure that he will chew up those words before it is finished, because, as he knows perfectly well, it is a very modest Bill. Both he and the noble Lord, Lord Scanlon, said that they do not like retrospective action, retrospective legislation or retroactive legislation. I think that that is a hare. This is retrospective justice, because, as they know perfectly well, it was as a result of the European Court of Human Rights saying—and this
676
was a staggering thing for them to say—that this Parliament, which, after all, is the Mother of all Parliaments had abjectly failed to protect the essential freedoms of its citizens, that this Government thought that it would be retrospective justice to ensure that, for those few people who may have been caught, there would be a method of remedy. That is what this clause is about.

The noble Lord, Lord Wedderburn, raised the problem of Gennard and he said "Let us have some light from Gennard". He said that every labour correspondent has a copy of the Gennard Report. All I can say to the noble Lord is that, if every labour correspondent has it, then they have something which my right honourable friend does not have, because, as he knows perfectly well, the Gennard report is not finished. It has caused much distress to Professor Gennard that his report has been quoted in extenso by various people, when, in fact, it has not been finalised. So it would be totally wrong for the Government to start quoting from a report which is only in draft form.

The real point about these two amendments is that the Government are seeking to give some compensation to people who have had a raw deal as a result of the previous Government's legislation. These people will already have suffered very considerable distress as a result of their dismissals, and it would be quite intolerable if the process of applying for this compensation were to be a yet further ordeal. That could well happen, if details of each individual's case had to be made public, as these amendments would require. The noble Lord, Lord Houghton, expressed regret that he offered a note of dissent. I assure him that he need have no regret for that, because I thought that his dissent was wholly admirable and totally justified. He said that it was like putting people in a pillory. I think that that is so.

The noble Lord, Lord Shinwell, very kindly and flatteringly described me as humanitarian. I think that that is the first occasion on which I have been called that, but there is always a first occasion for some things. He said that I am aristocratic and that is not the first occasion. Then he said that I was democratic and that is a matter of opinion. But the answer to this democratic, aristocratic, humanitarian argument is that he would not wish to see the light thrown upon individuals' cases for everyone to see, and, as he knows only too well, this is a cast-iron plank upon which all Governments operate, becuse there is a general principle that a Government should not make public the dealings between them and individuals, about such matters as tax, social security payments and so on.

This is a case to which this principle clearly applies, and it would be quite wrong for the Government to start publishing amounts of money which various individuals have received as a result of this legislation. That is not to say that information of a general nature about the compensation provisions in the Bill would not be made available.

The noble Lord, Lord Hatch, and the noble Lord, Lord Plant, said that they wanted the searchlight of democracy. They can have the searchlight of democracy, because they both know that Questions from Members of Parliament, or from your Lordships, about, for example, the number of applications which
677
have been made and the total amount of compensation which has been paid, would all be answered in full. In the same way, if your Lordships or Members of another place were involved with an application on behalf of a particular person, the Government would be as helpful as possible in providing all the relevant information for that.

The noble Baroness, Lady Seear, said that £250,000 is a lot of money to administer £2million, but I would just tell her that that is the maximum and covers staff salaries and other administrative costs. The salary of the assessor and the cost of advertisements will also have to be found from this maximum figure, and if the money is not spent it will not be wasted. I think she will agree that it is really a pretty small sum of money to be spent on the defence of what has been shown to be justice—

Will the noble Earl allow me to interrupt? Could he just tell the Committee what distinction he makes, so far as publicity is concerned, between other unfair dismissals going to a tribunal and the unfair dismissal that he has characterised in this Bill?

Earl Ferrers

When an unfair dismissal case goes to a tribunal, that is a legal proceeding and the amounts paid are paid by various people. The amounts of money which are paid by this method are sums of money paid out of Government funds. I will give the noble Lord, Lord Hatch, an analogy. He knows perfectly well that in business, or in agriculture, any grant that is made to an individual is not disclosed, because you would be disclosing an individual's private means. That is a factor which has prevailed under all Governments and I suggest that it is one which should prevail under this Government. My noble friend Lord Boyd-Carpenter asked for confirmation that the expenditure would be subject to review by the Comptroller and Auditor-General. Of course, he was entirely correct and was also correct in his mild altercation with the noble Lord, Lord Howie. The real point is not that these figures will not be known by the Comptroller and Auditor-General or by anyone else but whether or not they should be made public in a published report. It is that which the Government feel should not happen.

I wonder whether the noble Earl would say a word or two about the very mild and friendly altercation to which he referred. The matter between us centred upon certain irregularities, about which the noble Lord, Lord Boyd-Carpenter, was very worried. What worries us are the regularities, not the irregularities. It is quite clear that while the Public Accounts Committee might possibly, though not certainly, deal with the irregularities, it would not be empowered to deal with the regularities.

Earl Ferrers

I do not think that makes very much difference. I repeat what I said at the end. The fact is not that the facts will not be known; it is whether they should be published. The Comptroller and Auditor-General has a perfectly sound method of investigating all expenditure by Government, as all Government departments know. So, in this case,
678
I do not believe that it is correct to publish these sums. But I do believe that it is perfectly correct—and it will happen—for the overall figures to be available to those who wish to know them, by the normal parliamentary processes.

We are not getting on very well. It is a very simple amendment. What we are asking for is quite simple. I apologise to your Lordships for not having read part of Amendment No. 3. We want to know the Secretary of State's decisions and we want to know his grounds. It is no answer to that to say that what should be a judicial procedure—when you already know what it is, because it would be published—has been turned by the Government's own Bill into an administrative procedure and should therefore be kept secret. That is no argument —rather the opposite. That which is done in secret in the expenditure of public money on grounds which are not disclosed is far more obnoxious than keeping it secret in court when it is dealt with in camera.

With no disrespect to your Lordships who have otherwise spoken, may I make two points to the noble Earl, Lord Ferrers, and the noble Lord, Lord Houghton of Sowerby. I was very sorry that the noble Lord, Lord Houghton of Sowerby, said, as was said in another place by the Conservative Party generally, without one single piece of evidence to support him that these people would be pilloried. It is an offence to 12 million trade unionists not to produce evidence for that kind of allegation. Last year there were 35,000 cases which went before industrial tribunals. Very few of those cases were won, but quite a few of those which were won were won by non-unionists. There were 50 cases which went before the independent review committee. Both I and my noble friend Lord McCarthy sit on that committee. We have never heard from non-unionists who have come to argue their case before the committee that they have been pilloried. Until, therefore, somebody produces a shred of evidence I hope noble Lords will refrain from the rather dishonourable practice of speaking about people being pilloried when they have no evidence of it happening.

If there is a case, let us hear of it. I say that there is no evidence sufficient to override the basic point that a Secretary of State in deciding legal questions—noble Lords will see when we come to the amendments that there are thousands of legal issues—should get all of them right. Yet he is not obliged even to refer a case to a tribunal or to an assessor, unless he feels like it, and even then he can ignore the report which is made. We want to know the grounds of that report, where he has one, and the grounds upon which he acts. It is no answer to say, in broad terms, that it has got to be done like this because the European Court of Human Rights says that it must be so. With respect to the noble Earl, Lord Ferrers, it is not the case that the European Court of Human Rights declared that this Parliament failed to protect the essential freedoms of its people. That is a very broad proposition. The noble Earl obviously had not consulted the Secretary of State about that passage in his speech, because on 16th March in another place Mr. Tebbit said at col. 475:
It has also been suggested that the judgment of the European Court of Human Rights in the British Rail case was the main
679
justification for Clause 1 and Schedule 1. I should like to put the position on the record clearly and firmly. The judgment of the European Court in the British Rail case in no sense required the Government to bring forward those provisions. The judgment concerned only those who took their case to Strasbourg. The judgment has merely added further justification, if that were needed, for the Government's view that it is right to provide such compensation".
I disagree with the last sentence. I wholly agree with the first, because it is absolutely right.

We are going to have a lot of Gennard. The Government should save a lot of time by putting the draft Gennard Report in the Library. We know that it will be a draft report. Professor Gennard has no status to object to that, if the Government request it. Three parts of the Gennard research have already been published in the Department of Employment Gazette. It is only the part about the closed shop which has not been published. I am not sure whether the Minister is still saying that he has not seen it or that he has not got it. If so, he cannot have been speaking to the Secretary of State. Three times in Committee in another place the Secretary of State declared that it was in the department and had been discussed for months. So let us have the draft report and not the air of hugger-mugger secrecy which is befuddling this issue. Quite apart from Gennard, if Gennard had never seen the darkness and gloom, let alone the light of day, the simple point is that the Secretary of State will be taking decisions which would normally be taken by industrial tribunals. The grounds for those decisions would normally be published in reports. We say that he should publish his decisions and the grounds for those decisions in an equivalent manner.

Earl Ferrers

Before the noble Lord presses his amendment, may I make one or two points. It was entirely unwittingly, I am sure, but the noble Lord was guilty of one or two inaccuracies in what he said. He wanted to know about Professor Gennard's report and said that we must not be hugger-mugger. The fact is that the report is in the department. The fact is that the Secretary of State has not seen it. The reason why the Secretary of State has not seen it is because it is in its draft form. The reason why it is not being published is because, as a result of discussions which are normally carried out when these reports are made, it may be subject to considerable change or revision. Therefore, I repeat that it is wholly wrong to put in the Library a report which is not complete and whose final version may be changed. There is nothing hugger-mugger about that.

The noble Lord also implied that there was a difference between what I said and what my right honourable friend said. Of course the European Court did not say that it was necessary for us to bring in this legislation. What it did say was that in the case in front of them there were certain methods and dealings which went against the rights of the individual. We then said that if that is so there might be other people similarly affected. Therefore, we as a Government thought it was correct to bring in legislation so that if others were found to be in a position where their rights as individuals had been offended against there should be the possibility of redress. The noble Lord, Lord Wedderburn, and the noble Lord, Lord Plant, said that this offends
680
12 million people. It may offend trade unionists, but I cannot believe that—

The noble Lord said it is not true, but he has just said it. He has said that it offends 12 million people. All I am telling the noble Lord that this piece of legislation is being suggested in order to allow retrospective justice. It is because of justice that it is being brought forward. There is no secrecy about it. The noble Lord, Lord Wedderburn, came back and the first point which he made was that he did not want there to be any secrecy. I would ask the noble Lord to address his mind to any payment which a Government makes on anything. Look at tax matters; they are not divulged. Look at social security payments; they are not divulged. Look at grants to individuals; they are not divulged. Look at grants to companies; they are not divulged. It would be quite wrong to divulge in a published report payments of this nature to individuals.

Can we just get the question of the hour straight? The noble Earl has made an important statement. He said that the draft Gennard Report is in the Ministry but that the Secretary of State had not read it. We know that the draft report has been in the Ministry since at least the beginning of the year. Is the noble Earl really saying—over six months later, when there has been a Standing Committee in the other place sitting many days to go through the details of this Bill; when the Bill has been through its Second Reading and Committee stage in another place; and when it has been through its Second Reading here and is now at Committee stage here—that the Secretary of State has not even read the Gennard Report and that he has not got the information? We are not talking here about whether the report is ready for publication. We are not talking about looking for a commercial publisher for the report. There is good material there and the noble Earl has confirmed it is there.

Is the noble Earl really saying that all these stages of the Bill have been gone through without the Secretary of State even looking through the draft report, which the noble Earl says has been in his Ministry for so many months?

Before the noble Earl sits down, may I press him a little further on this report as courteously as possible. We are not dealing with the most earth-shaking matter but it has some importance, if only because the Government in dealing with this measure in another place have used the report in evidence. Possibly the Government have used it incompetently, possibly inadvertently, and certainly they have done so confusingly. But the Government have most certainly used the report in the course of the debate. There is a kind of convention, although I am not sure how firm it is, that when a document is referred to in Parliament, the whole document should be produced in some way.

681
It may well be that the Government are right in saying that the document is incomplete, is unusable, or is not in its final form. But at all events the Government have used it to some extent, and because the Government have used it they should certainly release it. It may not be possible for the Government to release it merely by way of publication, but there must be some way which the highly intelligent people who form the Government and who sit opposite us today can think of. Can they not publish an interim report? Or can they not publish somebody's reflections on an interim report? Or can they not publish the report in a green cover in the form of a discussion document? Or as a last resort, could not Professor Gennard write, "Dear Sir" at the front of his report and send it as a letter to the Secretary of State? There must be some way by which the Government can let us into this secret.

I really do think we are getting into a bogey-hole on Professor Gennard, if I may say so. The noble Lord, Lord Hatch of Lusby, said that I made an important statement. It was very nice of him to say it, but actually I did not think it was very important. In fact, I had given the information in an Answer to the noble Lord, Lord Underhill, on 23rd June. This is public knowledge and there is nothing funny about this. A draft report from Professor Gennard was received at the Department of Employment in February of this year. In Professor Gennard's view, his report is not yet complete, nor is it in a publishable form. That is Professor Gennard's view. It is Professor Gennard's report and he elects when he wishes his report to be published. It is perfectly normal for a person producing a report to consult a department to make quite certain that some matters concerning factual accuracy or statistical accuracy are correct.

When the noble Lord, Lord Hatch of Lusby, asks whether my right honourable friend has read some of the draft, I am not privy to what my right honourable friend reads in his bed at night, but I would not think it would be a draft report of the Gennard Committee. My modest experience as a Minister is that one has so much paper to read which is fully documented detail that one does not read drafts which are then likely to be changed.

I do assure the noble Lord and your Lordships that there is nothing at all curious about this. Some extracts of Professor Gennard's work have been made public with the agreement of Professor Gennard, but that is a totally different thing from publishing a report. I can offer to put the same document as the Committee in another place had during the course of Committee stage in another place into the Library for your Lordships' attention. That is not the whole document, but I will see that that is done.

The noble Earl referred to the Question I posed to him. I accepted his Answer in the spirit in which it was given. But if at that time I had read the Committee stage in another place and had known that extracts of the report had been referred to, I would have pressed the noble Earl much further.

§Lord McCarthy moved Amendment No. 2:
Page 1, line 7, after ("State") insert (",after he has ascertained the opinion of the former employer and the trade union or unions which were parties to the relevant union membership agreement,").

§
The noble Lord said: This amendment is much in line with the kind of thing that we were seeking to argue on the two amendments we have just dealt with. I want to take Amendment No. 2 along with Amendment No. 12, because they are both similar ways of doing the same thing. The objective, once again, is to try to make the provisions of this part of the Bill more acceptable, more normal, more usual, more like the way in which issues of this kind are decided in the institution for deciding issues of this kind—the industrial tribunals.

§
I would say, in answer to some of the points which have been raised earlier, that we are not at this stage in any sense discussing the merits of this clause or the schedule; we are not discussing whether there should he in principle retrospective or retroactive legislation on this subject. We are trying to say how it should be done if it is to be done. We are not proposing delays, we are not proposing things which cost more money, though, as the noble Baroness, Lady Seear, says, there appears to be plenty of money available; we are asking why these things cannot be done in the normal way. For example, why cannot we have reasons, why cannot we have grounds, and, in respect of these two amendments, why cannot we have representation?

§
Both amendments instruct, or attempt to instruct,
684
the Secretary of State to take into account the opinion of parties to a dispute of this kind, in this case the trade union or the employer; in the case of Amendment No. 2, he is to take the opinion of the trade union or the employer before he uses his power, and, in Amendment No. 12, which is in fact in the schedule, to say that, if he decides not to use his appointed person, who is the nearest thing he has to an industrial tribunal, he must give certain representation rights which are similar to the kind of representation rights which are there when issues of this kind go to industrial tribunals.

§
We put this amendment down partly because a similar amendment was put down in another place, on the assumption, I think, that the Secretary of State or the Minister of State might very well say that it was not necessary, because of course, if the Secretary of State exercised this power, or if the appointed person exercised this power, it would be perfectly understandable for either the appointed person or the Minister or whoever it was to take representations from interested persons like employers or trade unions. But I am bound to say that if one reads the minutes of another place on this matter one gets the impression that it is very doubtful whether the present Secretary of State is thinking in that way at all. One of the points I would like to ask the Government is whether I am right in reading it in this way. Can we assume that it is so, that the Government seem to be thinking that an issue of this kind is a matter between the complainant and the Secretary of State?

§
It seemed to be said at one stage that since it was the Government's money they did not have to explain to any of us how it was used and they did not have to let in on this secret process, for example, the employer concerned, who, after all, it is being implied dismissed a man in a way in which he should not have done; if it was lawful, morally it was wrong, and some people persist in believing against all the evidence that it was necessarily against the European Court. Surely in that case the employer ought to be there to say whether he thinks that is so or not, and whether he thinks it is a fair interpretation of his position. But we have no guarantee so far, reading the speeches of members of another place at Committee stage, that that would be the case.

§
To show why there is a prima facie argument that these people most certainly should be represented, I am sorry to say—I apologise to the Committee for this—that we have to refer again to Professor Gennard. Professor Gennard tells us—and these facts have been revealed in another place or in the Department of Employment Galette or in one way or another—that 90 per cent. of the people who are covered by UMAs were recruited without the aid of UMAs; that two-thirds of UMAs in fact make provision for existing members to remain. Those are precisely the kind of issues which are to be covered by the clause. Professor Gennard says that in the vast majority of cases the negotiations surrounding the introduction of UMAs illustrate the desire on both sides to provide safeguards to protect individuals from possible abuses. That is what Professor Gennard is saying about the application of union membership agreements, or what the House insists on calling "closed shops". Indeed, there are only a very few cases where the agreement provides only for religious objections—for example, the British Rail
685
case and the Strathclyde case. Even there, quite often there are, in practice, practices which take into account the position of the very people with whom this clause is intended to deal.

Therefore, when the Government say as they have done, using the Gennard Report—that there are 325 potential cases which might be covered, I say that that is not so because they are just the number of people who may have been unfairly dismissed given the previous legislation; it does not follow that they were unfairly dismissed given this legislation. The people most able to demonstrate whether they were unfairly dismissed or fairly dismissed under this legislation are, of course, the parties to those agreements at the time: the trade unions on the one hand, and the employers on the other. That is the basis of our amendment. We are saying that surely in those circumstances the Government, to ensure that justice is done to employers, if not to trade unionists, and to see that justice is done to employers, if not to trade unionists, would allow them to make representations either if it is done through the appointed person or even more so if it is done hugger-mugger through the Secretary of State. I beg to move.

As the speech of the noble Lord, Lord McCarthy, confirmed again the idea which appears to be held opposite that Professor Gennard is not only relevant to every amendment to the Bill but is also the vehicle of quasi-divine inspiration, I for one should be grateful if one of the noble Lords opposite would tell me who he is, because I think that it might be of interest.

The noble Lord, Lord McCarthy, seemed, with respect—whether with the aid of Professor Gennard or with his own unaided intelligence—to have missed the point as regards this amendment. Of course, where an employer, or, under this Bill in future, a union, may be liable to pay compensation to someone unfairly dismissed, it is essential that the employer and the union should have the right of audience before the deciding authority. In this case that does not arise. The money is to be provided from public funds. It is, therefore, not self-evident that either the employer or still less the trade union concerned, really could be of any assistance. If they had to be brought in they would, of course, further delay the proceedings about settling these cases. That seems to be the common note, as it were, that goes through all these amendments. There seems to be a surprising wish on the Benches opposite to propound suggestions which, whatever other effect they will have, will mean that people who have suffered a grievous wrong for a number of years will experience further delay in having recompense given to them.

But what, really, does the noble Lord, Lord McCarthy, think the trade unions' position would be in these cases? The noble Lord, Lord McCarthy, knows trade unions well. Indeed, he may recall that he once electrified this House by saying that he knew them better than anyone else in the House. He knows, therefore, that some trade unions are very difficult. Indeed, there is one with which he is concerned at the moment which is so difficult that it is a pleasant surprise to your Lordships that the noble Lord, Lord McCarthy, is able to spare the
686
time to be here with us to give us his counsel this afternoon. Such trade unions obviously would be concerned solely to criticise the idea of any grant, or alternatively to try and get it cut down as much as possible to the person concerned.

Accepting as I do, as the majority in another place did and as I guess the majority here does the idea that the purpose of this not very important clause is simply to do very belated justice to a limited number of people as quickly as possible, it seems that this kind of amendment, apart from its other demerits to which I venture to refer, would be a sheer waste of time, and I hope that the Committee will reject it.

I find Amendment No. 2 which is now before us rather mysterious, in that the Secretary of State is asked to ascertain the opinion of the former employer. That is not difficult in the case of someone like the Railway Board. However, in the case of a company, the officials who were responsible at the time of dismissing the employee may be completely different and the representatives of the trade union may be completely different—they may have retired or been replaced by others. It will be quite impossible because many of these cases will certainly go back to 1975—seven years ago. In that case how could one, if one wished to do so, operate Amendment No. 2?

I should like very much to agree with the noble Lord, Lord Aylestone, that it will be extraordinarily difficult to track down this information if one feels that one needs to have it. In response to some of the remarks made by the noble Lord, Lord McCarthy, and to the query, "Who is Professor Gennard?", let me tell the Committee, if it is any help, that Professor Gennard was at one time a colleague of both Professor Wedderburn and myself. I do not know what light that throws on the matter.

As regards the speech of the noble Lord, Lord McCarthy, I was deeply shocked to find that he was taking the illiberal line that there are not going to be so many cases to be compensated as the Government think. That will be very nice. It will cost the tax payer less. But surely the noble Lord, Lord McCarthy, will agree that, if there is even one man to whom a gross injustice has been done, he should be entitled to compensation. It is no argument at all to say—and this is the old housemaid's baby argument—that because there are so few of them it does not really matter.

I hope that we shall not have the same position as we had as regards the previous amendment where we started debating the principle of the clause as in a "clause stand part debate" instead of discussing the actual terms of the amendment. It does not matter whether noble Lords agree with the principle laid down in Clause 1 or whether they disagree with it; we can still consider the amendment on its merits and that is what I hope the Government will do.

If we look at the schedules, we find that the individual applicant will be given the name of the person to whom the Secretary of State may, if he things fit, refer the matter for consideration and the individual, the applicant, may make representations. So the applicant will be completely free to say what he likes to the person concerned. However, it may not be truthful. I know
687
that there are penalties here for untruthfulness, but no one could verify whether what he said actually took place. Therefore, despite the rather irrelevant intervention of the noble Lord, Lord Aylestone— because that can be easily dealt with by making an adjustment on Report— I want to know whether the Government agree with the principle.

If we look at Schedule 1, paragraph 9, it says:
The Secretary of State may, of his own motion or on the request of the applicant, reconsider his decision",
as to whether it,
was made in ignorance of, or was based on a mistake as to, some material fact".
In other words, there is an opportunity to reconsider his decision if the facts given were not correct. Surely the most logical and sensible thing is to make sure that the facts are correct when the applicant—if he so desires—makes representations to the person appointed by the Minister. That seems to be sheer common sense and all the arguments of emotion on either side are unnecessary. Let us deal with that amendment as it stands, and the logic is such that the Government ought to accept it.

Perhaps I may remind the Committee of a point which I made in connection with the earlier amendment which we discussed; namely, that, as the Bill now stands, the Secretary of State is faced with the task of reaching a decision about events which may have taken place, say, six, seven or eight years ago, in the rather hazy distance of time. Surely, therefore he must not only rely on the word of the applicant and on the recollections of the applicant as to what took place those years ago; surely he must have what other evidence is available to him in reaching his conclusion.

The applicant will of course be claiming that he was victimised because he was not a member of a union, and that will be the complete statement of the applicant's case. But he may well conveniently have forgotten that the circumstances of his dismissal were more varied than that simple suggestion that he was a victim. There may be other reasons why it was concluded that he should be dismissed, as well as the fact that he was refusing to be a member of his union. Perhaps he was a bad time-keeper; perhaps he was a poor workman; perhaps he was guilty of stealing some spare parts. Perhaps, for a variety of reasons, the employer wanted to cease employing him, including the reason that he was a non-unionist. If they can be recalled, I suggest that all these factors should be taken into account by the Secretary of State or those who advise him in reaching a conclusion.

Surely suitable people to bring forward this additional evidence are those named in my noble friend's amendment; namely, the employer and the trade union, or unions, which were responsible at that time. They may remember these other factors which the applicant has conveniently forgotten. I think that there would be no other source, or no comparable source, that could be found from which the truth of that earlier situation could flow.

The noble Lord, Lord Aylestone, pointed to the fact,
688
quite rightly, that there might be difficulties in that the official at the company or the official at the trade union had retired or had died, that they had been replaced and that, therefore, it would be difficult to consult them. Clearly, that is so. But surely that reinforces our doubt whether the Minister can properly adjudicate on these things. How is he to know if the evidence that one hopes would be forthcoming from these other sources is denied him? He will be completely on his own, completely relying on the word of the man or the woman who is coming along and asking for money. I think that that is a completely unsatisfactory situation.

I rise to my feet because of the comments made by the noble Lord, Lord Oram, and I would suspect that anyone who is dismissed for stealing spare parts or failure to turn up to work on time can be legitimately dismissed and can take his case to the industrial tribunal where it can be discussed. What we are discussing today is the dismissal of people who fail to join a union and a closed shop agreement

I happen to be a member of the British Rail Board and I regret to say that I was a member of that board when this injustice was done. In case it should be thought that in these cases there is an employer and an employee side in discussing these matters, let me tell you that in a closed shop agreement there is only one side. The employees of British Rail who were dealt with in this case were dismissed because of failure to accept management direction, or something of that kind. They were not dismissed because the closed shop agreement insisted, and management had to carry out their dismissal. In that case an employee appealing against that has to face not simply the Secretary of State, or whoever is making the decision, but he has to face the combined decision of the employer and the trade union acting in concert, who have opted for a cosy life together. I should like to support the point of view that was made from the Liberal Benches, that where injustice is done against an individual we have to protect the individual, and that is important in our book.

Earl Ferrers

I thought that when the noble Lord, Lord McCarthy, introduced this amendment there seemed to be two phases with which we would become familiar. One was "hugger-mugger" and the other was "Professor Gennard". I agree with my noble friend Lord Boyd-Carpenter that they do not seem to be able to get Professor Gennard out of their system. As the noble Lord, Lord McCarthy, was speaking I could not help recalling the young boy who was going in for a Scripture exam. He was told "One question you are bound to be asked is the dates of the Kings of Israel, so for goodness sake remember that." When he went into the Scripture exam he found one question which was: Criticise the character of St. Paul, and he was lost. He just wrote, "Far be it from me to criticise such an eminent saint, but I append here with the list of the Kings of Israel."

I would simply say this to the noble Lord, Lord McCarthy; he may produce Professor Gennard the whole time, and he and I may use different weapons; he may use knives and I may use shells. But I do not propose to discuss Professor Gennard's so-called report, because, as I said on the previous amendment,
689
that has not been published. The important point in this amendment is that it seeks to invite:
the opinion of the former employer and the trade union or unions which were parties to the relevant union membership agreement".
The Government accept that the dismissals of those who will be eligible to apply under these arrangements were not unlawful at the time. There is no question of seeking to establish whether these dismissals were right or wrong in some legal sense. The sole questions at issue now will be factual ones which—and again I must emphasise this—cannot lead to any liability on the part of a former employer or trade union. In view of this there can be no case for giving a former employer or trade union the right to state their views, as these amendments seek. In fact, the views of the employer or of a trade union are neither here not there. What is requested and required is a matter of fact and not a matter of view. The fact is: Is he eligible for compensation under the Bill and, if so, by how much'?

It may well help your Lordships if I explain what the appointed person will normally have to consider in the case of each application. First, he will have to advise on whether the conditions of eligibility for compensation are satisfied—in particular, whether the applicant was dismissed for non-membership of a union in a closed shop and, if so, whether his dismissal would have been unfair had the main closed shop provisions of the 1980 Act been in force at the time.

Secondly, he will have to advise, where he thinks that the applicant does meet the eligibility conditions, on what compensation should be payable. In doing this he must have regard in particular to the actual losses suffered by the applicant as a result of his dismissal. What will be important in relation to these matters will be solely the facts necessary to answer the questions. Of course, in many cases these facts may be clear from the papers which the applicant himself submits. For example, an applicant could well have copies of correspondence from his former employer and the union concerned about his dismissal which quite clearly show that his dismissal was for refusal to be a union member in a closed shop. Equally, he may well have evidence which clearly shows the losses which he has suffered as a result of dismissal. In these cases there may well be no need for the appointed person to consult the former employer or the union concerned at all.

Then, of course, in other cases there will be more difficulty in establishing the facts. In these cases the appointed person will no doubt wish to ask the former employer and possibly the union concerned for details, and this the Bill permits him to do. I need hardly say that if there is any doubt about the facts of a dismissal or about the loss which the applicant has suffered, then the appointed person will seek the facts from any individual or organisations who may be able to help.

The real point is this: neither the former employer nor the union concerned will in any way be defending these applications. They are not being judged. They are not being made liable. They are in fact not parties to the case, and there is therefore no reason why they should have a right to make their views known.

I did not want to interrupt the
690
noble Earl because he is so kindly, but there is an aspect of this that has not been noticed. Take, for instance, anti-union free-riders who are sacked for non-member-ship. They would now have the automatic right to thousands of pounds of compensation where this kind of investigation has not taken place. The wide boy-1 use a term used among these people—up and down the country, as in the case of social security, could make use of this clause and slip in between without a proper investigation. Am I right, or exaggerating the case?

Earl Ferrers

I do not think that the noble Lord is right and I do not think that he is exaggerating the case. I think in fact that he is wrong. It does not give anyone an automatic right to anything. All that Clause 1 does is to permit the Secretary of State to make payments towards compensation, and the methods by which those payments should be adduced are in Schedule 1. Therefore, there is absolutely no question of anyone being given an automatic right.

The first thing they have to do is to get through the hurdles. Were they involved in a trade union? Were they dismissed by an employer between certain dates? Having got that fact fixed, it then has to be determined whether the cause of dismissal were such as to require a payment. Therefore, there is no automatic right.

I thank the noble Earl for his reply, because in some ways he has reassured us on this side of the Committee, but not entirely. I must answer one or two questions which have been asked. The noble Lord, Lord Boyd-Carpenter, says to me, "Who is Gennard?" He has clearly never heard of Gennard. I do not know whether Gennard has heard of him. Gennard is a professor at Strathclyde University who has written widely in the area of industrial relations. More important in this respect today, Gennard is the man the Government rely on, except of course they do not give us the evidence.

When they were pushed on the figure of 400 which came from a journalist on The Times, they said, "No, we are sorry: it is not 400; it is 325". When they were asked," Where did you get that from? "they said, Gennard". When they were asked, "What does Gennard say? Show us chapter and verse "they said," The Report is not in the Department of Employment". When they were told, "But you said it was", they said, "The Secretary of State has not read it". They have been putting one prevarication after another in our way ever since. That is who Gennard is.

The noble Baroness, Lady Seear, said something that I have to correct. She said that I said—and I think that Hansard will bear me out—that in some way if there is injustice it does not matter because it is a small injustice. I never said that. I would not say that. What we are trying to do here is not argue whether there is injustice. Indeed, I would say that we are being very impartial about this. We say that if you say there is injustice, have a judicial approach. Have an inquisitorial system. Let those who are interested and have evidence come and put their evidence. That is the way you will get justice. Do not do it—I am sorry if I say this again—hugger-mugger, with Gennard or not. Do it by a respectable judicial system. Even if there is only one baby, he is entitled to say whether or not he shall be suffocated by due process of law.

It would be a nice thing to do with an amendment to say that no one individual should be suffocated. No, I did not say that. I did not say that I am not concerned about injustice because there is only a small amount of it about. I did not say that. What I did say—and I say this in reply to the noble Lord, Lord Aylestone—was that we ought to have trade unionists and employers involved. He seemed to be saying at one stage that they will not have the evidence.

Let me give one example. There are certain kinds of unfair dismissal which it is quite impossible to decide without an employer. Take, for example, the case of constructive dismissal. In constructive dismissal the employer is denying that there was dismissal at all. He is saying that he provided the man with various alternatives, sets of job situations, and the man in the end said, "Well, that is not the kind of job that I call a job You are trying to dismiss me". The man might say, "I know that the reason is that I won't join a union". The employer might say. "No, it is not that. It is because the job is running out and I have to find you another job. I want you to do this, and it is not an unfair dismissal at all". That is a potential case of constructive dismissal. Is the employer trying to construct a non-job, or a less satisfactory job, as a way of getting the man out, or is there some undercover argument about non-unionism?

I do not see how equity, justice and fairness can be met unless the employer is a party to a process of that kind. The appointed person, or even the Secretary of State himself, if he was fair, would be more likely to decide that constructive dismissal had not been proved if the employer was not there. There are quite a number of cases brought in the industrial tribunals where the employer is condemned out of his own mouth. Without the ability to bring the employer to a tribunal to ask him to defend what he has done, one would be bound to say that the case was not proven, and the case after all has to be proven in the end.

This brings me to what was said by the noble Earl, and I thank him for it. I shall look carefully at Hansard tomorrow to see that I have understood it aright. He said that in certain circumstances the trade union and the employer would be sent for if, he said, the facts were in doubt. That is a considerable advance on what we were told in another place, where we were told that it is not really their business. It is an advance but it still leaves it very much in the office of the appointed person or of the Secretary of State to decide for himself whether he thinks the facts are in doubt.

What we want is a judicial process where the employer or the trade union can say, "The facts are very much in doubt. Maybe I cannot remember it rightly, but neither can be remember it rightly. I have certain evidence and documents, and I want to put them in". They may go one way or the other, but the essence of a judicial process is that we go through that process. That is why I moved this amendment.

Earl Ferrers

May I try to enlighten the noble Lord,
692
Lord McCarthy, a little more. It is sometimes a difficult process, but I will have a shot. His amendment really refers to allowing the trade unions or the employers to give their opinions. I would ask the Committee to address their minds to Clause 1 and to the schedule to which it refers. Clause 1 starts with the words:
The provisions of Schedule 1 shall have effect for the purpose of enabling the Secretary of State",
to do certain things.

The provisions of Schedule 1 say, first:
A person may apply for compensation under this Schedule where—(a) he was dismissed from his employment",
between various dates;
(b) he did not bring, or brought but did not succeed in, a complaint of unfair dismissal; and(c) if the 1980 amendments had been in force".
Those are all matters of fact and, returning to Clause 1, it is on those matters of fact that the Secretary of State may make payments. It is erroneous, in my modest judgment, then to throw in by legal right the opinion of trade unions or employers on what is ascertained to be a matter of fact. If the matter of fact has not been ascertained, then, as I said, the appointed person may get the information from whichever source he likes.

Is the noble Earl aware that he could dispose of all the anxieties of my noble friend by seconding a group of tax inspectors to the department concerned to deal with claims? They would make sure that nobody received anything to which they were not entitled.

Before we part with the clause, I wish to make a few comments about its contents and significance. I have no intention of making a Second Reading speech—

Earl Ferrers

May I interrupt the noble Lord? He is of course entitled to make a speech on the clause stand part, but as the clause and Schedule 1 are so interlinked, I wonder whether he would think it convenient for the Committee if his clause stand part speech were made on Schedule 1 as opposed to Clause 1?

§Lord McCarthy moved Amendment No. 4:
Page 22, line 5, leave out ("if he thinks fit") and insert ("after a declaration by an industrial tribunal that an applicant falls within paragraph 2 below").

§
The noble Lord said: We return to the same area as we were discussing previously, with another modest amendment which no doubt again will be misunderstood. Here we are making a further attempt to regulate the discretion of the Secretary of State. The amendment
693
would allow the Secretary of State or his appointed person discretion in respect of paragraph 3 on the question of compensation assessments. It merely says that in relation to the sort of questions that were discussed by the noble Earl on the previous amendment, it shall be seen whether he was covered in the time-span of the provision, whether he got previous compensation from a tribunal, whether he was a person who had a conscience or deeply-held conviction and whether he was an existing employee when a union membership agreement was signed. Those matters, should be referred to an industrial tribunal, and such matters as the level of compensation payment could, on the basis of the amendment, be left to the Secretary of State. I beg to move.

The Minister of State, Northern Ireland Office (The Earl of Gowrie)

I wish at the outset to thank noble Lords opposite, and particularly the noble Lord, Lord Wedderburn, for their kind act in welcoming me back from the deep peace of the Northern Ireland double bed to the hurly-burly of the industrial relations chaise longue. It is nice to be involved in these matters once more. I wish I could celebrate this homecoming by accepting the amendment, but it is defective and it would not be appropriate to accept it. The noble Lord is anxious not to be misunderstood, but I think he misunderstands an important principle in the Bill.

It is important to be clear that Clause 1 and Schedule 1, as my noble friend Lord Ferrers said in an intervention, establish no legal rights or duties whatever, and therefore impose no liabilities of the kind for which a tribunal is normally and appropriately considered the right judicial body. By contrast, payments under Clause 1 and Schedule 1 will be wholly discretionary, and therefore what the Secretary of State will be asking from any person appointed to consider applications is advice in the exercise of his discretion, and that would not seem to us to be an appropriate function for a judical body making judgments, as it were, like a tribunal.

Therefore, it falls on us to remind the Committee why the discretionary basis is so important. The reason why Clause 1 and Schedule 1 provide a discretionary power to make payments where an applicant is eligible, rather than providing a right to payment in such circumstances, is that we are dealing with particular and specific exceptional cases. Those cases cannot all be foreseen in advance, though it might be helpful if, by way of example, I rehearsed the ways in which we could foresee some where it would be wrong to make a payment, even where the eligibility conditions were satisfied.

For instance, in the case of those people who took their case to the European Court of Human Rights, we know that they could be, and some have been, compensated separately, so obviously it would be wrong in those cases to make a further payment under the powers in Clause 1 and Schedule 1. Equally, a case could arise where an applicant met the eligibility conditions and was recommended by the appointed person to receive a payment but was also a debtor of the Department of Employment arising from some other matter. Again, that would not be a very likely occasion but it could happen, and hence the discretionary power. The Bill, therefore, as drafted ensures
694
that the Secretary of State can act flexibly and sensibly in those special circumstances, and Clause 1 and Schedule 1 as we have said, are targeted on specific and special individual cases.

I understand the legitimate concern expressed by the noble Lord, Lord McCarthy, that discretionary powers in legislation should not be exercised in any arbitrary fashion. It may therefore be helpful if I give the Committee the assurance that it would only be in the wholly exceptional cases such as I have outlined, where the Secretary of State might exercise his discretion not to pay compensation where eligibility conditions were met. I hope that, in the light of that assurance and for the other reasons I have cited, the Committee will reject the amendment.

The noble Earl is, as ever, helpful, but he does not answer the case. As I understand it, he is saying that he cannot accept the amendment because the kind of evidence which will be required is advice on the exercise of discretion, and that is the kind of advice for which you do not need the judicial process. It seems to me that, in practice, that sort of advice will be about the facts, advice based on some system of cross-examination in which you attempt to establish what happened, with one group of people saying one thing and another group saying another, and in the end you will take a decision on the balance of whatever you believe to be the case and, accordingly, you will tender your advice to the Secretary of State on the exercise of his discretion. That is all a matter of fact and I should have thought a matter very fit for the exercise of the judicial process.

Secondly, the Minister says there is a discretionary element, and the example he gives of that—I fully respect it—is that of the men who took the golden road to Strasbourg. He says, "These chaps might indeed have been compensated already, and therefore the Secretary of State might quite rightly in his wisdom decide that even though a case had been made out on the facts", as I would put it, "nevertheless he does not think that they ought to be given any compensation". Well, I accept that, and under the amendment it would be perfectly possible because that is the part of the discretion of the Secretary of State which is protected under the amendment. We are seeking to make a division between discretion used to decide whether or not there should be compensation or the amount of any compensation, and what the Minister calls advice in the exercise of discretion, which I think becomes a matter of fact and, I repeat, is a suitable matter for judicial process.

The Earl of Gowrie

There is one further point I should like to add. There is of course precedent for what the Government propose. In the Pneumoconiosis etc. (Workers' Compensation) Act 1975, the Government of the noble Lord provided for the appointment of a single person rather than a tribunal to consider awards of compensation. That was in the issue of efficiency. One was simply trying to determine whether somebody suffered from the disease and how he had contracted it. That would not seem to be a case for a tribunal. In their Employment Protection Act 1975 the previous Government amended the Conservative Government's Employment Agencies Act
695
1973, which enabled the Secretary of State to appoint a person to consider representations made by a person whose licence under the Act was to be revoked or refused.

So this seems a Perfectly normal and conventional way of behaving when dealing not with issues of rights or issues of liability, but With issues of individuals who have been caught up in a particular situation which has now been corrected under general law. That is why we feel that the tribunal would be an inappropriate organism and why the amendment should be rejected.

I think that we are getting closer and closer to the point. It is perfectly true that anyone can give examples from precedent and the way that administrative decisions have been taken. It is absolutely right; of course there are administrative decisions arising out of the pneumoconiosis issue and the employment agencies issue in which the way that the noble Earl has described it is the way in which it has been done. There are also many other tribunals, such as rent tribunals and tribunals dealing with social security payments and unemployment benefits, where the judicial process is carried out. We are saying that this is something which is part of a tribunal procedure, which requires a judicial process. It is not a simple matter of administration, and therefore it ought to be part of the judicial process.

§
The noble Lord said: I am afraid that this amendment rather hots up the temperature, just a trifle. It is not just a matter of simple administrative justice and judicial process. I am now taking Amendment No. 5, and with it I should like to take Amendment No. 6. They are amendments of a different kind, because whereas our other amendments to the schedule are for the most part about due process of deciding whether there is eligibility and what process there should be to determine compensation, here we are arguing about who should be covered.

§
We want to start the debate about spontaneous, deeply held convictions—and I hope that we can keep the debate at a fairly low temperature. In the amendment we are suggesting that the criteria to be satisfied in order for a person to be eligible for payment should be narrowed, so that someone who has accepted at the time of his engagement into employment an obligation as a condition of employment that he should be a member of the relevant trade union—in other words, someone who came on the job and joined the union in the first place—should not be covered by the provision. If we were able to, and if we had decided in some way to attempt to change the 1980 Act, your Lordships might logically say that this kind of amendment should have been in that Act. But that was the 1980 Act, and it was some time ago. We are talking about the present Bill. We are saying that surely it is reasonable to make a distinction between someone who has a deeply held personal conviction or conscience of long standing, and someone—in particular
696
in relation to retrospective legislation of this kind—who has gone before the tribunal, the appointed person, or the Secretary of State, and said, "Well, it is perfectly true that I joined the union some time ago, but now I am telling you that when I was dismissed in fact I had a deeply held conviction that I shouldn't be a member of the union".

§
One becomes a little doubtful here about mentioning Professor Gennard yet again, but it is a fact that the great majority of the exceptions in existing agreements go more to conscience than to deeply held personal conviction. The great majority of the exceptions relate to people who are non-members of a union when the closed shop or union membership agreement is imposed and such exceptions would not permit I think that there is reason for it—the development of what I call the spontaneous, deeply held conviction. That I think is quite understandable and is a common-sense situation.

§
Most people who have practical experience of the closed shop would say that in the area of conscience there are two kinds of objectors. There are those who can quote some religious objection; for example, the Corinthians, or I should say the Christadelphians—

They both quote the same part of the Bible; that is why I have got them mixed up. I am not sure whether the noble Lord is making a statement from a sedentary position, or whether he wants to intervene. Yes, the Christadelphians and the Seventh-Day Adventists both have the same position and both quote St. Paul's Epistle to the Corinthians. They say that, since that states that they shall not be yoked with an unbeliever, they cannot join the Transport and General Workers' Union. Well, this is a deeply held, long-term religious conviction which anyone who is a member of the sects can show he holds.

The other kind of deeply held conviction or conscientious objection is held by someone who for a very long time has had a rooted objection to trade unionism per se. This is something that is probably in the individual's family, background, and experience. It is not something which comes spontaneously, and certainly not after there is passed legislation providing compensation. Therefore, we are saying that it would be perfectly reasonable to accept this modest, but perhaps controversial, amendment registering the fact to which I have just referred. I beg to move.

Earl Ferrers

I was glad that the noble Lord, Lord McCarthy, said that he would do his best not to hot up the temperature of the debate by moving his amendment No. 5, which includes the word "and I did not think that of itself it was particularly inflammatory, but of course Amendment No. 6 goes further, and the noble Lord quite rightly took the two amendments together. Professor Gennard popped up again, but I shall not answer the noble Lord on that particular point.

The purpose of the amendments is to exclude from compensation anyone who was dismissed for not being a union member in a closed shop, but who had accepted the fact that he had to be a trade union member when he took the job in the first place. The reason the
697
amendment is not acceptable to the Government is that it would deny compensation to some people whose dismissals would have been found to be unfair had they occurred between 1974 and 1980, even though they might earlier have agreed to join a trade union when they took the jobs.

Schedule 1 to the Bill provides for compensation to be payable to people whose dismissals would have been unfair under the main closed shop provisions of the 1980 Act. One of those provisions makes it unfair to dismiss an employee from a closed shop if he objects on grounds of conscience, or other deeply-held personal conviction—that is in addition to the possibilities of dismissal on grounds of religious feelings—to being a member of any trade union whatsoever, or of any particular trade union. This is one of the key safeguards which we believe should clearly have existed between 1974 and 1980.

This amendment would exclude from compensation some people who were dismissed, without any remedy, from closed shops between 1974 and 1980 but who had genuine conscientious objections to union membership although union membership might have been a prerequisite of the job. This is because the effect of the amendment would he that no compensation could be paid where the applicant had accepted when he took the job, no matter how many years earlier, the obligation to join a union. This quite rules out the fact that by the time of his dismissal he may have held genuine conscientious objections to union membership.

These objections will of course have to be demonstrated. Applicants for compensation who resigned from a union in a closed shop and were sacked as a result will have to show that their objection to remaining in the union amounted to a genuine objection on grounds of conscience of other deeply-held personal conviction to being a union member. In those cases the appointed person will have to advise the Secretary of State on whether in his view the employee did have a genuine objection at the time of his dismissal. Obviously, it is unlikely that the appointed person would take that view where the employee had resigned from his union because of, say, a squabble over the payment of dues. But in other cases an applicant might have happily joined a union 15 years earlier but subsequently felt that the methods of operation of that union had become so distasteful to him that in all conscience he could no longer remain in membership.

One could find an example, for instance, as a result of a union having called for industrial action in, say, a hospital, which he regarded as morally wrong and indefensible. It will be up to the appointed person to advise on whether, in such a case, there was a genuine conscientious objection to union membership under the terms of the 1980 Act. But it is the firm view of the Government that where a sacked employee had genuine conscientious objections to union membership at the time of his dismissal the case for paying compensation, with no "ifs" or "buts", is overwhelming. This amendment would prevent compensation from being paid in some such cases, and I am afraid, therefore, that I could not advise the Committee to accept it.

We on these Benches are unable to support this amendment. Nobody in your Lordships' Committee knows better than the noble Lord, Lord
698
McCarthy, that it is not only union members who change their minds; it is union leaders who change their minds, and those in control of a union inside an organisation. As the noble Earl, Lord Ferrers, has pointed out, a union which may have been entirely acceptable in its approach, its policies and its attitudes when an individual joined it, may, because of a change of control inside the organisation, become genuinely unacceptable, and in such cases such people should be as entitled to compensation as any other people.

Lord Oram

It seems to me that one of the great difficulties in this whole business would be to sort the sheep from the goats. By sheep I mean those who have a genuine claim, and by goats—and there will be goats—I mean those who are trying it on; those who see the attraction of certain amounts of money and make an application. The genuine ones will have a genuine conscientious objection to belonging to a trade union, but the others may pretend to have those genuine feelings. But let us remember that the amounts of money involved will be quite sizeable. We do not know the number of cases, but £2 million is available, and if there are a few cases it might be adjudicated that the amounts of money are quite large. It worries me that, after a few cases have occurred and it is seen that the amounts of money awarded are rather large, this may activate in other people's breasts some retrospective consciences.

A man may have taken a job quite easily earlier on, even though he knew that there was a closed shop, and may without any difficulty have accepted the conditions. Then, as I think the noble Earl suggested, there would be cases where perhaps there has been a quarrel with a shop steward, or there has been nonpayment of dues, or where for some other reason he parts company with his firm. But then, five or six years later, when memories are perhaps dim on these matters, that could be translated into a highly-principled attitude in opposition to unionism, and he might state a case which it would be difficult to fault in relation to his claim.

I was impressed by what the noble Earl said, that this amendment may nevertheless be hard on some sheep; that is, some genuinely conscientious people who have changed their minds. I recognise that, and I recognise that, therefore, this particular amendment may be faulty. But I believe it ought to be our effort to find another formula, perhaps at a later stage, by which that particular difficulty could be overcome. But at the same time I think we ought to tackle the problem to which this particular amendment is directed; that is, to make sure that phoney people do not put up a case which may get through.

The speech of the noble Lord, Lord Oram, was, if he will allow me to say so, much more reasonable than that of his noble friend on the Front Bench. I agree with the noble Lord, Lord Oram, that there could well be cases of people who, having joined a union, then withdrew their membership for quite inadequate and, indeed, perhaps, even unworthy reasons—they did not want to pay the dues, they did not like the face of the shop steward, or many other reasons of that sort which very few people would wish to support.

699
But this amendment deals not only with them but also with a class of person for whom I think, by implication, the noble Lord, Lord Oram, has, as I have, very great sympathy. That is the man who takes the very brave step, being already a member of a union in a closed shop job, of saying that, nonetheless, something that that union has done or is doing is so intolerable, so unjust, so wrong, that he is not prepared to continue in membership and support it. This is the kind of person which recent developments in this country can well be producing, perhaps in substantial numbers.

My noble friend on the Front Bench referred to the case where there is a dispute in a hospital. It so happens that yesterday I went to see what was happening just across the river at St. Thomas' Hospital, where the union concerned in the health service dispute is adopting an attitude and a procedure by way of picketing which is doing a great deal of damage to a number of wholly innocent people. There the representatives of the union have taken it upon themselves to determine whether or not the case of a patient wishing to come in is urgent. and whether or not certain supplies that come in are necessary; with the result that in one of the finest hospitals in the world, just across the river, one-third of the beds are now unoccupied although normally in July they are 90 per cent. occupied, and with the result that, though normally they would have 130 operations a day, they are down to 30 because the supplies—the necessary sterile dressings, and so on—are being denied entry.

The result is that many people who need treatment are being denied it—perhaps they are not going to die next week through lack of it, but they may well be going to die next year because they have not had treatment in time. I can well understand how many members of that union—decent, honourable people—may well feel it quite intolerable to remain a member of it. Indeed, I do not want to upset the noble Lord, Lord McCarthy, by going a little nearer the knuckle, but it appears that there are a number of engine drivers who are inclining to a similar view in respect of another dispute. People who put their own jobs at risk and, ex hypothesi in this case lose them, because of convictions of that sort are probably more entitled to compensation than any of the other categories covered, because they have shown a willingness to sacrifice their own interests to what they believe to be right. This amendment would eliminate that category; and for that reason if it is pressed to a 'Division I shall vote against it with conviction and determination.

The more I hear of this discussion the more I am convinced of the total air of unreality that exists. If I may illustrate where I think the discussion is going, it reminds me of the preacher who, when he was asked the reasons for his success as a preacher, said, "I tell them what I am going to say, then I say it, and then I tell them what I have said". This is the way it appears to me we are going. I say to the noble Baroness and to the noble Lord, Lord Boyd-Carpenter, that I do not know of any trade union which in admitting a member does not say, "Do you abide by the rules and constitution of the
700
union?" and members sign a declaration that they will.

The rules and the constitution are complex indeed.

If I may give an illustration, our national committee debated the Industrial Relations Act 1971. I was empowered as president of that union to oppose that Act by a majority of two votes out of 52 people. There were many members of our union who may disagree with that decision, but all the debate took place within the constitution.

We are now saying that if somebody has deeply held convictions against a decision arrived at in a constitutional way, he can use this legislation to get compensation if he is dismissed as a result of opposing the union. Do not be surprised if it happens in a reverse way—because there are many who think that their unions are too complacent and are not taking the steps to justify the interests of their members. Will the same impartiality hold out for those individuals? I doubt it very much.

All that it portrays in all its nakedness is the vendetta against trade unionists who, for whatever reasons, are convinced that the way forward for their members may be to take certain actions which noble Lords opposite think is inconsistent with actions they should take. If legislation is to operate in that manner, then I hope that we have no part in it. In fact, I am more than ever convinced—and I do not like saying this—that it really is wrong to debate amendments on this Bill. The Bill is so iniquitous, in my view, that by moving amendments we may be involved in something which, I repeat, in its stark nakedness is coming out as a result of contributions made by noble Lords opposite. If we are going to legislate for a position where people can get compensation as a result of disagreeing with a constitution that they voluntarily entered into when joining a trade union, then that exposes this Bill for what it truly is.

The noble Lord, Lord Scanlon, speaks of reality. One of the great realities which faces us, surely, is that we require a responsible trade union movement. Nothing that I should say should be misunderstood and thought to indicate the contrary, but —and there is a "but"—the reality of the man who joins the union in the circumstances where he cannot earn his livelihood unless he does so—and the noble Lord, Lord Scanlon, then says that there are the rules and constitution and they are complicated but he signs and accepts them—is, in submission, not realistic. Then one comes further along the line to seize the point of realism.

Things happened which the noble Lord, Lord Boyd-Carpenter, referred to but we all know of them without having to refer to them. Anything which I say is assuredly not intended to raise the temperature of this debate for the reason I have already given. But the man grasps the realism, the man cannot take it any longer and he resigns. In those circumstances, sheep—Lord Oram's sheep and goats. It is a very tough goat that puts his job on the line, if he is a sham goat, to fool the arbitrator that he is a sheep. If one looks at it from a realistic point of view, in my submission—and I repeat that nothing I say will ever be intended to be contrary to the trade union interests, as I see them—this amendment affords no fair resolution to a problem which has in it the seeds of injustice.

I hesitate to dissent from the views expressed by my noble friend Lord Scanlon but I must do so. In doing so, I realise that I am dissenting from the views of someone whose passionate commitment to the trade union movement has been demonstrated time and time again over a long period and it is a commitment which is quite admirable—and I say that in total sincerity. I myself have been a member of a trade union for most of my life and I now earn my living, in part, negotiating with the unions, the NUJ and NATSOPA. I find in dealing with these unions a picture which is not quite the same as the picture which my noble friend Lord Scanlon sees. I understand how he sees it, and the passion with which he sees it, but it does not look quite the same from each side of the table or from the ends of the table or in the mind of an independent observer.

It is true that individuals join unions voluntarily and accept the rules of the union. It is true also that individuals join unions involuntarily and accept the rules of the unions. And the conditions are different in each of these cases. I think it is important that my noble friends on this side of the Committee should think very carefully about that distinction, about the distinction between the commitment of a volunteer and the commitment of a conscript, however willing he may be to accept the discipline of the union's rules and constitutions, and all those things to which my noble friend Lord Scanlon draws attention.

In my lifetime I have seen people who have voluntarily undertaken union membership turned off by the attitudes of their trade union colleagues, and that is something which seems to have been left out of the debate—at least, on this side of the Committee. My noble friends must realise that it is possible to join a trade union in good faith, to have loyalty to that trade union in good faith, and to wish to continue to have loyalty to the trade union. Yet there comes a time when the union's attitudes and behaviour are improper. We must recognise this on our side of the Chamber and we must recognise that if people, voluntarily or involuntarily, have entered into a compact with a trade union and find through experience that their compact is not living up to their legitimate expectations, they have rights. Where I think my noble friend Lord Scanlon goes wrong—and nobody recognises his sincerity more than I do —is in placing the organisation, the structure, before the individuals who make it up and whom the structure is intended to serve. It is not good socialism and it is not good trade unionism to forget the individuals which the Labour movement is intended to work for.

I do not intend to rebel on this particular amendment. All I do is to urge my noble friends to think very, very carefully about the nature of trade unionism and to reflect on the manner in which they are allowing the attitudes of a particular Secretary of State to provoke them into taking up postures which are mistaken. I would urge: do not be provoked into defending everything that the trade union movement does, because not everything that a trade union does is defensible.

I am afraid we have been drifting away from our comparatively modest amendment. I suppose that was inevitable and it augurs badly in terms of the times of the Committee, for what is going
702
to happen when we get on to debate this schedule and whether Schedule 7 shall stand part of the Bill? This is a modest amendment that we have here. I said it was a controversial one, but it is really about the degree of compulsion to be imposed on union membership. What I believe noble Lords do not fully appreciate is that we are discussing this in the context of a post-1971 situation. We are discussing it in the context of unfair dismissal. The fact is that from 1893 onwards the common law had in effect decided that the closed shop was lawful. It remains lawful for cartels and professional associations. It is not entirely lawful for trade unions because they are in the employment relationship, and simply because of the law of unfair dismissal. That is what has changed and that is what had to be dealt with in 1974—the law of unfair dismissal.

The question is: are we to say that all forms of dismissal on grounds of trade union membership are unfair?—in which case we are going back on a policy which has been accepted in common law and in statute law from the end of the 1880s and under the 1906 Trade Disputes Act, and which is still the case in relation to other kinds of combination, which is very unfair—or are we to say: "No, there will be certain conditions and circumstances in which union membership agreements shall be lawful, in which the closed shop is lawful and in which union membership can become a condition of employment"?

Once you take that view and move away from the view that now is the opportunity to make the closed shop in all forms and in all ways an unfair dismissal liability, then you have to specify the grounds and you get into all kinds of practical trouble. The late Labour Government said—may be rightly, maybe wrongly—that you could draw a line down genuine religious conviction. At one stage they added" conscience". The present Government say in addition, "conscience and deeply-held personal conviction". It is a line which could be argued. We are putting in this amendment one small point relating to where that line shall be drawn, not for legislation as a whole for the future but from the point of compensation in the past. We are saying that one way of trying to make that line is to draw a line—I fully accept the words used by my noble friend Lord Oram—between the sheep and the goats, as we see it. I do not suppose we shall convert many people on the other side, but that is the sole limited objective of this amendment.

§Lord McCarthy moved Amendment No. 7:
Page 22, line 37, at end insert ("before an industrial tribunal one month after that dismissal").

§
The noble Lord said: If I may, I should like to take this amendment with No. 8. We are talking here about compensation again. We are back to the detailed way in which the clause is to be applied, and once again we are taking as our model the way in which unfair dismissal legislation works in the ordinary run-of-the-mill way in industrial tribunals. Therefore, we are saying that the clause should be amended so that on page 22, line 37, the provision goes on to read:
before an industrial tribunal one month after that dismissal".703
We are saying, in other words, that the principles on which compensation should be based should be the same principles as in cases before an industrial tribunal —one month after that dismissal. Therefore, we have to take out several lines further down in the clause; and that is the purpose of Amendment No. 8.

§
If this amendment were carried, the effect would be that the calculation of the maximum compensation would he taking into account anticipated loss—which is the method by which industrial tribunals decide—and therefore one would try to create the situation in which an industrial tribunal would have had one month after the dismissal, as against the calculation of the maximum which is there in the clause at the moment, which takes into account the actual loss sustained. That is the principle enunciated in lines 43 and 44 which we want to delete.

§
We would argue that, as it stands, this could mean that the system of compensation for people covered by this clause and the amounts of compensation could and should be quite different from those for all other kinds of unfair dismissal, which are anticipated loss, and not subsequently assessed actual loss. I fully appreciate that this principle could go either way and that on the present system, which we use in the great majority of cases before all industrial tribunals, people may get more by anticipated loss than they actually incur, because two days after they have received their reward from the industrial tribunal they get an enormously improved job and in fact they have very little loss at all.

§
On the other hand, it could work the other way. Somebody who has been told that he has an anticipated loss would in fact have had a very substantial actual loss. The thing could work both ways. We are not trying to do something that we feel is necessarily against the interests of the individuals covered by the clause. We are trying once again to put this legislation square with the legislation as it exists with all other forms of unfair dismissal. Therefore, I beg to move this amendment.

Earl Ferrers

The basic principle of these compensation arrangements is that what is now to be payable should be broadly what an industrial tribunal sitting at the time of dissmisal would have awarded if it had found the dismissal unfair. The first of these two amendments would place this imaginary tribunal hearing one month after the date of dismissal. In fact, an aggrieved employee has three months within which to go to a tribunal. This amendment therefore seems to introduce an arbitrary time scale, for which there appears to be no obvious merit.

The second amendment is somewhat more complicated. In the interests of common sense and consistency, the Government have added three technical refinements to the basic principle which I have just described, and the amendment would sweep away those refinements. If the second amendment were accepted the first refinement to go would be that in paragraph 3(a). This states that the fact that a tribunal at the time might have ordered reinstatement, rather than compensation, is to be ignored. It seems to me to make little sense to consider at this stage whether an imaginary tribunal would have made an order giving
704
the individual his job back. Clearly, that individual did not get his job back or he would not now be seeking compensation. So to take such a consideration into account would, I respectfully suggest, not be sensible.

§
The second refinement, in paragraph 3(b) of Schedule 1, which the amendment would remove is what I might call a small touch of generosity on the Government's part. If I may put it simply, compensation payments for unfair dismisal have, since June, 1976, been made in two parts. One part, which is known as the basic award, relates to the age and length of service, and the second part, which is known as the compensatory award, is designed to compensate for actual financial losses as a result of the dismissal. The complication arises because, before 1976, there was no basic award, although the second compensatory part was available. The Government wished to make consistent arrangements for all the candidates for compensation, so we added paragraph 3(b), which allows for an equivalent to a basic award to be paid to everyone w ho is eligible, whether he was dismissed before, or after 1976.

§
The third refinement, which the amendment would remove is in paragraph 3(c). This allows the imaginary tribunal to be credited with knowledge of what actually happened between dismissal and the present day. Normally, in assessing the compensatory part of the award, a tribunal has to guess at what may result in the future as a result of the dismissal, on the basis of such knowledge as is available to it at the time. But under this Bill these losses will now be known and, as the noble Lord, Lord McCarthy, said in some cases they might be higher than that which would have been imagined, and in other cases they might be lower

§
The fact is that they would be known and it is only common sense to base compensation on the reality of what has actually happened, rather than on the guesses which a tribunal might have made at the time. These amendments would, I suggest, create arbitrary obstacles to the practical operation of these arrangements, and I hope that the noble Lord, Lord McCarthy, will therefore not seek to press them.

§
Page 22, line 47, at end insert—
("() Subsection (3) shall be applied to take also into account the cumulative effects of inflation since the dismissal occurred and any legal or other special costs incurred by the person dismissed in his attempts to obtain proper compensation.").

§
The noble Viscount said: I am sorry that the noble Earl, Lord Gowrie, is not on the Front Bench. I should have liked to add my welcome to that rendered to him by both sides of the Committee. I hope that he has not gone back to the Emerald Island and will be here during other parts of our proceedings. The noble Earl, Lord Gowrie, referred to the compensation paid to those who had proceeded to Strasbourg, and I think that it was the noble Lord, Lord McCarthy, who referred to the golden road to that city. If he was referring to the three ex-British Railways men, I have to tell the Committee that, apart from a small eleemosynary payment before Christmas, no compensation has been received by the railwaymen, because no
705
friendly settlement has yet been achieved. But that helps to illustrate the point of my amendment.

§
Those three gentlemen were out of their jobs from 1975. If they, and those who have suffered with them, are compensated on the basis of money values in that year, it does not need a statistician to calculate roughly what would he the value of that money in present-day terms. Therefore, I ask the Government to add this clause in fair justice to those people, because other people—even noble Lords on the Front Bench and Members of Parliament—have had their wages increased. Although it may be the intention of the Government and the Secretary of State to pay them compensation which allows for a diminution in the value of money, they have not so declared. Therefore, I ask that they should now declare that this is their intention. I beg to move.

Lord Spens

If I may make one small addition to what the noble Viscount has just said, I have asked the Library to make a quick calculation of the increase in the retail price index since 1st January, 1976. To date, it has risen by 117.7 per cent., which means that the value of any awards to anyone in 1976 has gone down by at least 50 per cent. and should, therefore, he doubled in order to bring about a reasonable and satisfactory compensation.

When the noble Earl is addressing himself to the noble Lord, I wonder whether he will apply the same argument to the trade unionists who have made their submission for a wage increase on the same basis, that inflation is eating away their standards of life.

Earl Ferrers

That is wholly outside the amendment. Therefore, I shall satisfy myself with not addressing my mind to that point.

I cannot allow the noble Earl to get away with that. If he does not reply to what I said, he cannot reply to what the noble Lord said. Accuracy on a vital issue like this cannot be smothered away in a few seconds with a tiny bit of humour, because there are 12 million people outside this Chamber who will be watching desperately what will happen if their standards of life are depressed, and if their rights to increase them in order to enable them to buy things from manufacturers and many organisations which are represented by noble Lords opposite are lost. That is all they want to do with their wage increases, and I fear that they will not be prepared to have a vital aspect of their point of view dismissed by a cursory joke.

Earl Ferrers

The noble Lord, Lord Molloy, said that I cannot answer the noble Lord, Lord Spens, without answering him. All I can say to the noble Lord is that he had better wait and see. What he said was totally out of context with the amendment. But as I have not even been permitted to reply to the noble Lord, Lord Spens, the noble Lord, Lord Molloy, does not know whether or not he will be satisfied—

My noble friend had a part in this amendment. He merely moved it. Therefore, if I may he permitted the courtesy of your Lordships to make my speech in my own way, bad though it may be, I shall endeavour, probably inappropriately and inadequately, to satisfy all sides of the Committee.

If I may first address myself to the amendment which my noble friend moved, this would increase the compensation which is payable. Naturally, the Government have a good deal of sympathy with the sentiments which have been expressed by the mover of the amendment, but, for reasons which I shall explain, and which I hope will be understood, we would prefer this amendment not to be made.

There are two strands to the amendment. The first is that under the amendment compensation would have to be calculated, taking full account of inflation since the date of dismissal. As your Lordships will appreciate, the Government have not ignored the ravages of inflation in drafting this part of the Bill. Paragraph 3 of Schedule 1 provides that interest is to be payable on the sums of compensation which are calculated to be appropriate by the appointed person. What we have done is to apply exactly the same principle which is employed by the High Court where it considers that a plaintiff has been kept out of money which he should have had earlier. That is the explanation of the reference to an Act of 1838 which your Lordships can see in Schedule 1. I can assure your Lordships that the rates of interest payable are not those which prevailed in 1838. The rates under that old enactment have moved with the times. The rate which is currently payable stands at 14 per cent. per annum.

This interest will not amount to total protection against inflation—there, perhaps, I have answered totally satisfactorily the question asked by the noble Lord, Lord Molloy—although it will go a substantial way towards doing so. But it is our judgment that it would be wrong to place beneficiaries under the compensation scheme in an uniquely privileged position in relation to inflation and in relation to all other cases which are treated in this way. That is why we base this interest provision in the Bill on the normal practice which prevails in the High Court.

The second part of the amendment calls for account to be taken, in determining the compensation which is now to be payable, of any legal or other special costs which may be or which may have been incurred by applicants in their attempts to obtain compensation. I have explained in relation to earlier amendments the general principle behind the assessment of compensation under the Bill, which is that the compensation now payable is to be calculated on the basis of what an industrial tribunal would have awarded the applicants at the time, had their dismissals been found to be unfair.

Industrial tribunals can include in such compensation any expenses which are reasonably incurred by a complainant in consequence of the dismissal, but legal costs are not covered. The reason for this is that it is considered that complainants who come before tribunals do not need to have legal representation at industrial tribunal hearings. This is not therefore a cost which is normally met from the public purse.

It is only right that once again we do not place applicants under these compensation arrangements in
707
the Bill in an uniquely privileged position in that respect. I understand my noble friend's difficulty about the people who went before the court. I understand that an interim award only has been received and that the case is before the court now, but in view of the reasons which I have given I hope that my noble friend will consider that the purposes which this amendment seeks to cover are in fact covered in the Bill.

As I had to attend a long meeting of Sub-Committee E of the European Select Committee of your Lordships' House I was unable to hear the first part of this debate, but I know quite well what must have been said. Indeed, it has been admirably reflected in the speech of my noble friend Lord Ferrers. My attitude to the matter is to a very great extent governed by the unfortunate experience of the three railwaymen and the terrible delays that have taken place in their three cases. Their cases were started, I believe, nearly five years ago and even now they have not been resolved. That was not entirely—in fact, scarcely—the fault of the European Court. I am sorry to say that it was very largely the fault of various branches of Her Majesty's Government. One has to face this fact. If, therefore, my noble friend Lord Ferrers could give us some idea of the expedition, or lack of expedition, with which these other cases which will come under the statute eventually will be dealt with, it would enable my noble friends to judge what they should do as a result of the reply which my noble friend Lord Ferrers has given.

Further to that point, the noble Baroness, Lady Seear, raised the point of the £211/4 million for xpenses. Have we been dealing with inflation accountancy? Am I right in assuming that the Government would have to give at least an increase of that amount and that it would be part of the expenses of many of these cases which have been held up? We are pushing judges more and more into a difficult situation relating to trade unionism. The Government and Members on both sides of the Committee know well that a worker who is dismissed for non-member-ship can claim compensation from both employers and the union, in which case the tribunal will ultimately decide what proportion is to be paid by each side. This would be temptation, but under Clause 9 and other parts of the Bill the union could ultimately be made to pay the whole amount. This is a point which has to be remembered when one considers the attack on the unions. This is a second attack which follows on from the attack in the last Employment Bill with which we dealt.

Lord Spens

May I answer the point made by the noble Lord, Lord Molloy. I have in front of me the same journal from the Department of Employment from which I extracted that increase in the retail price index. It shows also the increase in average earnings. Since 1976, the increase in average earnings amounts to 205.5 per cent., so I do not think that any of the 12 million trade unionists mentioned by the noble Lord, Lord Molloy, have any need to worry about the situation.

Since we on the Cross-Benches are not always animated by the passions which rage on the two sides, I wonder whether I could try to reconcile the noble and gallant Viscount who moved the amendment with his leader on the Front Bench. There is a problem, if you take the issue of inflation and interest rates together. It is quite clear that if there had been nil or modest inflation since the 1970s when these settlements might have been made, the interest rate in the intervening period would have been, typically, 2, 3 or 4 per cent. That is the real rate of interest which prevails over a period when inflation does not disturb our calculations. If, therefore, I heard the noble Earl, Lord Ferrers, correctly—that there will be a 14 per cent. cumulative interest rate allowed—that amounts over a five year period precisely to a doubling of the capital sum. Actuarially, a 14 per cent. interest rate exactly doubles your money in five years. It is known as the rule of 70: five fourteens are 70. Therefore, I believe that we have resolved the issue. The interest rate will accomplish the purpose sought by the noble and gallant Viscount and peace may therefore reign on the Conservative Benches.

It gives me great pleasure to agree with the Government on something tonight. We would put forward three arguments against accepting the amendment. First, it goes back to a point which I made earlier. It is a consequence of the wrong basis for compensation. Because the Government are seeking to make a distinction for these people and to introduce a quite different system of compensation based on actual loss rather than anticipated loss, they reach an apparent anomaly in which they are anticipating, or trying to assess, something which has moved as a result of inflation. If they had accepted our basis for loss, they would not have this problem. Secondly, the amendment would, if accepted, be a further departure from the way in which industrial dismissal compensation is assessed and from the way in which compensation is assessed in all other forms of tribunals. They do riot get their assessments inflation hedged. Thirdly, as the noble Earl has said and as he has been supported by the Cross-Benches, built into the clause as it stands, because of what we have on interest payment, is a very substantial element of indexing, anyway. We oppose this amendment.

Earl Ferrers

We seem to be getting on famously and I am glad that the noble Lord, Lord McCarthy, and I both agree that, on the whole, the amendment would not be an improvement to the Bill. The method by which compensation is payable, as I have explained, in fact allows for interest to be paid. I said that interest was running at the rate of 14 per cent. at the moment. In fact, the interest would be calculated on the basis of the interest rates which prevail during the course of each year for which the person was denied his monies. The principle of that is that it gives the person the interest for the money he should have had. It does not seek to take into account inflation. The fact that it may almost cover inflation would be incidental. I can assure the noble Lord, Lord Harris of High Cross, that peace will reign on the Conservative Benches—if it did not reign before.

709
The noble Lord, Lord Davies of Leek, asked whether the £2 million would be sufficient if inflation was to be taken into account. That figure can be increased at a later date by money Resolution should it be found to be inadequate. I wonder if I could refer to the particular case of the British Rail employees which has been mentioned by a number of noble Lords. It may help if I make it clear at the outset that it is not intended that these three men should receive compensation under the arrangements which we are now debating. This is because they will be compensated as a result of their successful case before the European Court. It may also be helpful if I underline the current position on compensation for these British Rail employees. As some of your Lordships will know, after the court's decision was announced the question of compensation was referred back to the European Commission of Human Rights to see if they could negotiate a friendly settlement between the railmen and the Government. Regrettably, this did not prove possible, with the result that the question of compensation has now been referred to the European Court of Human Rights, who will pronounce upon it. Therefore, the question of compensation is at the moment sub judice, and it would be incorrect for me to comment upon it.

My noble friend Lord Renton asked how quickly these applications would be dealt with. It is always difficult to give a precise figure. I would have anticipated that they will be dealt with in a few months of the application being received.

§Lord McCarthy moved Amendment No. 10:
Page 23, line 33, leave out ("may, if he thinks fit") and insert ("shall").

§
The noble Lord said: This is the last amendment we intend to move before we come to the clause stand part debate. It is really again making the point, about the discretionary elements in this clause and the extent to which everything is left to the Secretary of State. Because I am moving No. 10 I do not propose to move Amendments Nos. 11 and 13, and Amendment No. 12 has already been talked about. Perhaps the Committee will allow me to drag the arguments together for all these amendments, because in these amendments essentially we are making a point which we are making in the clearest possible way in Amendment No. 10.

§
Amendment No. 10 draws the attention of the Committee to the fact that at the moment, as the clause stands, the Secretary of State can completely ignore any recommendations or proposals, if he thinks fit, of his self-appointed person. In Amendment No. 11 we are trying to restrict the sense in which he can make any payment other than that of his appointed person. In Amendment No. 13 we are seeking to show some way in which one might try to modify the extent to which he was bound by the findings of fact in such
710
proceedings or in a report issued by the appointed person.

§
The situation now under the clause—and none of our amendments has found favour with the Government tonight and so the clause remains exactly as it was—is that the Secretary of State, it is true, set up, we suppose, this quasi-judicial authority of the appointed person, but that this appointed person does not necessarily consider all cases because the Secretary of State does not have to refer them all to him. Even if the Secretary of State does refer a case, he does not have to take any notice of what the appointed person says; and even if he makes a report the Secretary of State does not have to publish that report. Then, even if the appointed person says that the complainant before him should have no compensation or a very low level of compensation, the Secretary of State is free to tell us, if we ask him, whether he has decided not to abide by the report, but not to tell us what it was. He is free to decide for himself what level of compensation he wants to give.

§
We say that this is a monstrous procedure. Going back to an argument we had earlier with the Government Front Bench, we say that this is essentially a tribunal affair. One is trying to decide whether what one man says is so. Other men are entitled, in fairness and in natural justice, to come and say whether they agree or not. At the end of the day, justice should be done and should be seen to be done. If the Government go so far as to set up an appointed person, if not a tribunal, then they should be bound by what that appointed person says. They should tell us what is said, and they should not be free to give compensation which is totally at variance with, and might be totally opposed to, any report which their own selected, appointed person makes. I beg to move.

The Earl of Gowrie

As I understand them, the amendments of the noble Lord, Lord McCarthy, would require the Secretary of State to refer any applications to an appointed person in place of the provisions of the Bill, which merely enable him to do so if he thinks fit. Surely it would be inappropriate and wasteful to be required to refer all cases to the appointed person, because commonsense suggests that inevitably there will be cases where the applicant is quite clearly ineligible for compensation. He might, for example, have ruled himself out. This point arose at Committee stage in another place. I can do no better than repeat what my honourable friend the Parliamentary Under-Secretary said then:

The Secretary of State would not refer a case to an assessor when, for example, the person applying for compensation had filled in the initial form and declared that he was dismissed in 1971. In such circumstances it would be a complete waste of everyone's time if the case went to an assessor because the applicant would have disqualified himself from compensation by his initial statement. I can assure the Opposition that if a prima facie case is advanced by the applicant in his initial application, that case and every other case will go to an assessor for him to help the Secretary of State.
I can assure the Committee that applicants whose cases are not referred to the appointed person will be told the reason why.

Again, an assurance to this effect was given by my honourable friend. Having been given the reason why presumably a person could go back and find out
711
whether there were other good reasons why he should apply. With those assurances, I hope that the Committee will agree to reject the amendment which, if we passed it, would cause an enormous amount of niggling, time wasting and bureaucratic procedure—and I am surprised that the noble Lord has put it forward.

If the noble Earl will forgive me, I am not sure we can accept his argument that this would cause a great deal of administrative delay of an expensive nature. If an assessor has to exist in any case, is there any reason why all the potential cases should not he sifted through to him? Obviously, all those which do not require his attention could be put on one side. This happens perfectly normally in your Lordships' own committees, when documents from the EEC are put into a sift, some marked A, some marked B, some marked C. I see no reason whatsoever why this should not happen in this case.

The Earl of Gowrie

Again the noble Lord, Lord Kilmarnock, is edging towards an interpretation of the role of assessor as a kind of independent quasi-judicial, quango-like being. He is not. He is there to help the Secretary of State. The important figure in all this is the Secretary of State. That is, of course, a difference of view between us and the noble Lord, Lord McCarthy. The reason for this, as I rehearsed at an earlier period of time, is that we are not in territory here where we are trying to establish the rights of individuals or the wrongs of their case, but to correct injustices created at a particular period of time for particular individuals, which has now been corrected in terms of the broad judicial principle by the 1980 Employment Act.

The noble Lord does not help me; he makes me despair. I do not see how he can say that he is not trying to establish the rights of individuals. On exactly this basis, the Government tell us, the rights of individuals will be established by industrial tribunals under the 1980 Act. The 1980 Act will decide in precisely the same circumstances, the Government tell us, whether or not there has been an unfair or a fair dismissal, and they will do it by the system of a tribunal, they will do it by a judge, they will do it by a quasi-judicial process; they will not do it by trusting the Secretary of State.

I really cannot see how the Government can have it both ways. On the one hand, the main stream of their legislation is to be administered through industrial tribunals. They have said in particular under what circumstances there will be fair and unfair dismissal from union membership agreement areas under the 1980 Act. They then seek to reconstruct in the 1982 Act a sort of shadow 1980 situation, so that the same thing applies as though there was a judicial system, as though there were tribunals, and they even say that the compensation method is the same. Yet the noble Earl comes along and tells us that he is not trying to ips divided: Contents, 61; Not-Contents, 102. DIVISIO establish the rights of individuals; he wants an assessor and he does not want a judge. We must press this amendment to a Division.

We now come to the question of Schedule 1 and Clause 1 because they are, as all sides of the Committee have accepted, intimately related to each other. We come to a situation where, totally unamended, we have to decide whether we can support them or not. We have said—and the noble Lord, Lord Wedderburn of Charlton, said in particular in opening the debate on the first amendment—why we find these two sets of provisions unacceptable. As he said, there was no consultation with the other interested parties. Every other part of the Bill, whatever one might think about it, was the subject of consultation with the CBI, the TUC the employers' associations, the Institute of Personnel Management and so on. Every part of it was, in a way, in the Green Paper and in the consultative document. That cannot be said of these provisions.

Secondly, these provisions have been opposed by many employers—I do not say by all employers, I do not say (because I do not know) by the majority of employers, but by a number of influential and important employers' associations; for example, the Engineering Employers' Federation, the British Institute of Management and the Institute of Personnel Management. Those three organisations, for example, have had considerable reservations about the practicality, about the sense and about the equity of introducing these provisions at this time.

Thirdly as the noble Lord, Lord Wedderburn, also said and, indeed, as he quoted from the Secretary of State to show, there can be no doubt that what is provided here goes far beyond what the European Court suggested. I want to say something in this debate about my attitude towards the European Court decision and about the attitude that we take towards the European Court decision, because it is time that something was said. Let me say something negative. There was nothing in the European Court decision which covers the kind of matters which are being introduced in Clause 2, and there is nothing in the European Court decision which covers many of the provisions of Clause 1 and this schedule. The European Court decision, as we see it, essentially goes centrally to the question of existing employees.

Next, £2 million has been put aside. Based on the figures of Professor Gennard, it works out at
714
something like £5,000 or more for each one of those people if, in fact, they all come forward. It is a considerable sum of compensation—£2 million of public funds. No case has been make out for wide-spread abuse and no case has been made out, I suggest, in this Committee tonight for distributing that sum in that particular way.

I would remind the Committee of the series of amendments which we have put down in an attempt genuinely to improve the way in which this sum is distributed by moving back into the way in which unfair dismissal compensation is assessed in all other unfair dismissal cases, including unfair dismissal out of union membership agreements under the 1980 Act; by referring the matter to an industrial tribunal; by giving those involved a right of representation; by ensuring that the Secretary of State even if he had discretion had to have respect for tribunal criteria such as, for example, the assessment of compensation; and by saying that at least the Secretary of State should be bound by the report of the person he appointed. None of those amendments has found any acceptance on the other side. We have had instead, as the noble Lord, Lord Wedderburn, suggested, a series of assertions about victims working in open shops who would be victimised or would not make their peace with the union, with no attempt to sustain what has been said.

So there is only one case left for this schedule and this clause and I have to address myself to that before dividing the Committee on whether this particular Schedule 1 should be agreed to. There was something strange about the 1974–1979 period and that was said by the Secretary of State in another place. On 16th March at column 474 of Hansard in another place he said:
1974–79 was the only period when public policy positively encouraged dismissal without remedy from closed shops even on grounds of conscientious objection to union membership".
I repeat:
without remedy from closed shops even on grounds of conscientious objection to union membership".
I suggest that that is at best a statement of ignorance and at worse an intentional misrepresentation of the facts.

Public policy—if it be public policy to allow a legal position to perpetuate and continue—has encouraged dismissal without remedy at least since 1893, since the decision of the Mogul Steamship case. It is true that, of course, the consequences of that case, which concerned a cartel of shipowners, was not applied to the trade unions until somewhat later. But it is now universally accepted that it should have been applied at the time of the 1893 decision and if it was not applied immediately afterwards—and of course it subsequently was applied—and if it is difficult, for example, to reconcile the trilogy of cases decided at that time one with another, that is because the judges unfortunately were showing their partiality against trade union organisation. But by the 1900s they had recovered their impartiality and in the 1920s in a whole series of cases, the most famous being Reynolds v. Shipping Federation in 1924, they established absolutely clearly the legality of the closed shop at common law. There was no protection, no remedy for dismissal for anyone in this country until 1971. If that was not enough, if it was
715
just the common law, in 1906 Parliament enacted the Trade Disputes Act which quite specifically was designed, or one of its provisions was designed, to legalise what we now call union membership agreements.

The common law being what it was and what it is, there continued to be bumps. One of the famous bumps was the case of Rookes v. Barnard which required yet another piece of legislation in 1965. Nevertheless, the situation is that all that time until 1971 those well known supporters of trade unionism—Stanley Baldwin, Bonar Law, Neville Chamberlain, Winston Churchill and Harold Macmillan himself—all sat down in a situation in which the closed shop was perfectly, completely and utterly lawful and in which public policies positively encouraged dismissal without remedy from closed shops, even on grounds of conscience and objection to union membership!

If the noble Lord would give way for a moment, with the greatest respect, I think that Reynolds v. The Shipping Federation was reported in 1924 Chancery Division and was a decision at first instance. So far as I remember, the whole legality of the closed shop was considered by the House of Lords in Bonser v. The Musicians' Union, which was before the Act to which the noble Lord referred. I may be wrong, but that is my recollection of the law.

I think that the noble Lord is right, but it does not affect the point. I am saying that there was a whole series of cases in which in common law judges accepted what they came to call the "trading interest defence". Indeed, they were bound to do so if they were fair since the Mogul case, because the Mogul case presented that if you had a combination of people—whether it was a combination of trade unionists, employers or whoever—and in combination they harmed other people, if they could provide themselves with a trading interest defence and if they could show that they were not doing it on grounds of malice but were doing it to defend their trading interests, the courts would not interfere with the regulation of competition. In fact, in the leading cases they had a classical defence in terms of laissez faire; they said that it was not for the courts to intervene.

I am saying that Reynolds was a case in point. I could have quoted the most extreme case in 1944—the Crofter case—where it is arguable that the House of Lords in the Crofter case went further than the 1906 Trade Disputes Act lawfully to accept the provisions of a closed shop. Therefore, we go back to a situation in 1971. The present Secretary of State for Employment is quite wrong in saying that this is the only time we have allowed the closed shop to be lawful.

What happened in 1971 was that we created unfair dismissal rights. As I tried to say earlier this evening, once you create unfair dismissal rights, you have to face the question: shall these circumscribe or in any way constrain the already accepted common law on statute right to refuse to work with non-unionists and to make trade union membership a condition of employment? It is fair to say that under Mr. Heath
716
the Conservative Government—though it is not acceptable to the present Government to mention anything of this kind about Mr. Heath—actually went further than they have dared to go so far. He made the closed shop unlawful—utterly and completely. You could have agency shops if you were a registered union, but you could not make trade union membership a condition of employment.

Then we had a Labour Government who decided—I do not want to shorten this long discussion—that they wanted to allow genuine religious objection. The present Government, building on the European Court decision—though I must say that the present Secretary of State does not do this—seeks further to constrain the limits under which unfair dismissal is acceptable in a union membership agreement and to constrain the circumstances in which a fair dismissal was possible inside a union membership agreement. We are saying tonight that to all practical purposes they have made union membership agreements un-enforceable. We opposed that when they did it in the 1980 Act and, therefore, we oppose it when they want to do it backwards into the period of 1974–79.

Noble Lords may say: What about the European Court decision? We take the view that the European Court decision does not go to the issue of personal conviction. Any references to deeply held personal convictions in the Strasbourg decision are not germane to the central issue; they are what we in this country call obiter. The Strasbourg decision had nothing to do with ballots, pace the 1980 Act. It has to do with the existing employees. It is perfectly true that there are references in the Strasbourg decision to the need for a choice between unions. The Government are not proposing this, but we have an amendment on paper which will be discussed either tonight or at some other time, which deals with that issue. We shall define our position then.

However, the central question is whether one accepts the Strasbourg decision from the point of view of what it does to existing employees. I am bound to say that I do. I am in a fortunate position because in 1964 I published a book called The Closed Shop in Britain, and I actually have a copy, though no one else seems to have one. The main reason that I know so much about Professor Gennard is that he is going to make it out of date, curse him. However, in that book I suggested in 1964 what I then called a registration shop agreement, and I continue to believe that a registration shop agreement is the best way in which to solve the central problem of the existing members. It is the best way in which to reconcile existing legislation with the Strasbourg decision, and it will operate in a much more civilised way than anything which is being put forward by the present Government.

Therefore, as everyone else has done so, I intend to read from The Closed Shop in Britain. I said that there should be three conditions to be satisfied and that when those three conditions were satisfied, it would be unlawful for any union to proceed against an existing non-unionist on grounds that he refused to belong to the union. I said:
all future labour engaged on certain types of work in certain areas must become and remain members of specified unions; (2) Existing members in those areas would not be permitted to lapse from the union, and if expelled lawfully would be liable to be discharged; (3) Existing non-unionists in these areas would be
717
'encouraged' to join the union, and if they refused reasonable 'efforts would be made to employ them in areas not covered by the registration shop.
But that if an employer was prepared to say to a union that he would sign conditions one, two and three—this was at a time when we did not have unfair dismissal legislation, at a time when the closed shop was perfectly lawful and the then Conservative Government were quite happy to see it continue—in those circumstances and under that condition any union which proceeded against an existing non-unionist could be unlawful. I believe that we could move to a situation in which a registration shop agreement was the proper, civilised way to deal with the very real problem of existing members. But this provision, this statute, these clauses and this schedule are not the way, and we wish to oppose them.

I simply want to say briefly from these Benches that throughout the period from 1974 to 1980 we have consistently argued that grounds for unfair dismissal should include, not, it is true, deeply held personal convictions, but conscientious grounds as well as grounds of religious conviction. It is for that reason that we shall vote for this clause standing part of the Bill.

Very briefly, as I know that we want to adjourn, my objections to Clause 1 and Schedule 1 are twofold. The first is contained in the words in Clause 1 "who in certain past cases". In other words, as has already been mentioned this afternoon, this is retroactive legislation which I, personally, think is bad and dislike, whichever party happens to be in government. But it was described by the noble Earl, Lord Ferrers, as retrospective justice. This seems to me to be very revealing. Why is it that the defence of the non-unionist or the lapsed unionist is retrospective justice, and why is it that the years 1974 to 1980 are so important? What about before that? Was it not retrospective justice to compensate those who were unfairly dismissed before 1971 when they had no right to any redress? That is my first point.

My second point is that this is a political Bill brought forward for political reasons with the eyes of its movers on the Conservative Conference in October, and has very little, if anything to do with the conduct of industry in this country or with those who work in industry. Of course the closed shop, a voluntary closed shop, has always been the objective of the trade union movement. That is what makes sense. When the working class were attempting to defend themselves against their masters, the nearer a union got to 100 per cent. Membership the stronger it was.

That is still the case. But I believe that that situation has now started to crack. Even when there have been full closed-shop agreements, two-thirds of them have always allowed the conscientious objector to union membership. But now this Government are determined that they are going to break the trade union movement, and they have selected this particular issue. I ask again why is it different to have a man or woman dismissed unfairly because of breaking a union agreement, of leaving the union, than it is to have a man or woman dismissed unfairly by an employer? And this still continues. Above all, may I ask the
718
spokesman for the Government, why is it more important to defend the non-unionist who is dismissed than it is to defend those who are dismissed, and are being dismissed, through sex or racial discrimination?

I understand that the average or the median figure for compensation at industrial tribunals for unfair dismissal is under £600. According to this Bill we have been told, and we were told from the other place, and told in the Standing Committee in the other place, some people can expect to get between £20,000 and £30,000. Why the difference? I suggest that the difference is to be found within the Conservative Party and not within the industrial field of this country.

Finally, as this attack on the trade union movement progresses it will become obvious that the Government—already it is being forecast that there will be another Bill next year—are determined to break the trade union movement of this country because they know that a strong, united trade union movement means a strong Labour Party and a strong Opposition. We have not been given answers to any of these questions either in the other place, or in the Standing Committee, or here.

Above all—I come back to the noble Earl—nobody is asking you to publish the Gennard Report; nobody has ever asked for that; all we have asked is that we be given the same material that is available to the Government in discussiing this Bill. That has not been done. All that was given even in the Standing Committee was a couple of sheets of paper. We have not had even those.

Why is it—and I suggest that there is a simple answer—that those who have read the Gennard Report, which apparently is not included in the night-time reading of the Secretary of State, apparently do not believe that it can be equated with this Bill? Therefore, the Government want to get this Bill through before the Gennard Report is published, or before the information that Gennard has produced is available to Members of Parliament.

I am sure that Members of the Front Bench opposite, as has happened frequently in the past, will accuse me of making a class-biased speech. Yes, that is what I am here for. But let me point out that the introduction of class bias came from the Government when they published this Bill. Nobody can read this Bill and consider for one moment that the Government are other than completely anti-trade union. They are not legislating for the employers. They are not legislating for the companies. They are legislating for trade unionists. I consider it blatant effrontery to suggest that those of us who are opposed to this Bill, with the whole weight of the trade union movement of 12 million people behind us, are introducing class into this discussion, because the class element of this Committee was introduced when this Bill was published, and it was introduced by the Government.

I shall be brief. This is the kind of legislation which arouses strong passions. That is clear from speeches we have heard this afternoon, and that of my noble friend Lord Hatch who has just sat down. The reason why it arouses these passions is because ideologies are involved. It is because of these passions and the ideologies that I would ask the Government to pause even at this late date and consider
719
whether or not they are doing the right thing in Schedule 1.

The Government should really consider the nature of the legislative process. It is one thing to pass measures through Parliament, through both Houses. That can be done with the aid of majorities and with the co-operation of Members, and laws can be passed. But the passing of laws is only the beginning. Once a law is passed, it has to work. It is the working of a law which is important. That means that the kind of laws we pass here ought to be laws which are likely to work. Legislation of this kind has one powerful characteristic; namely, that in order to work it depends to a very large extent on the willing acceptance of the people to whom it is applied and on their co-operation in making the legislation work.

It seems to me, and I have said this before, that there are many parts of this Bill which are sensible and sound, but Clause 1 and Schedule 1 are not among them. Clause 1 and Schedule 1 have, from the Government's point of view, one overwhelming defect, and that is that they are held to be offensive by a great many honest and law-abiding trade unionists. Not agitators, not Trotskyists, but ordinary working folk. They believe that these clauses are wrong.

They believe that they are wrong for two reasons, both of which have been mentioned today. The first is that the compensation offered is out of key with the compensation offered for other kinds of unfair dismissal. That is not thought acceptable by ordinary honest folk, nor should it be. Secondly, the determination of the amount of compensation is seen to be in the hands of the Secretary of State, and his alone, despite the gloss which was put on the constitutional arrangements earlier by the noble Lord, Lord Boyd-Carpenter. It is not thought acceptable that the compensation should be in the hands of the Secretary of State without it being open to the fullest scrutiny.

For those reasons, it is clear to me, and I hope to other noble Lords, that the schedule does not make the Bill acceptable to people generally, and because the schedule makes the Bill unlikely to be accepted, it makes the rest of the Bill unlikely to work, and that is why the Government should think carefully about the matter. There is little point in throwing away those elements of the Bill which they think are desirable and worthy—I agree with them on many of them—for the sake of the provisions which are seen to be ideological in content and which seem to be aimed at assuaging ideological appetities rather than doing anything else. I appeal to the Government to think again and not to throw away the whole Bill in order to gain a point at the beginning of it.

The Earl of Gowie

It rather grieves me to have to start by making remarks—I shall try to concertina them because I know we want to adjourn—by way of disagreement with the noble Lord, Lord Howie, because his is the kind of philosophy in relation to industrial relations that I very much share and, if I may borrow the clothing of the noble Lord, Lord McCarthy—

—and use the schedule stand part as an excuse for some self-promotional literary material, I also wrote an essay on industrial relations in which I argued rather as the noble Lord, Lord Howie, does. However, I think that in this case the noble Lord, Lord Howie, is wrong. We are not dealing with ideology in this clause. Obviously there are ideologies and they differ. But here is an attempt to redress a wrong and compensate the individuals who suffered that wrong. Far from thinking that unacceptable to the vast majority of ordinary hard-working people, it would be quite unacceptable if we did not seek to do this.

It is in the nature of modern societies and modern economies that institutions get big. We understand the forces which make unions, banks, commercial organisations, insurance companies, even government itself grow so big. And as institutions grow in scale, it is necessary for individuals to be protected as they get caught in the grinding institutional machinery. This part of the Bill is clearly a piece of liberal legislation, designed to protect the freedom of individuals and compensate them where they find themselves caught up in the machinations of the big battalions.

It is for that reason that I wholly reject the comments of the noble Lord, Lord Hatch, about this being a piece of class legislation. It seems an astonishing claim, when you think of the Walsall dinner ladies, Joanna Harris or the British Rail workers who were dismissed, to consider this as class-based legislation. I regret his charge utterly.

To return to the much more reasoned exposition of the noble Lord, Lord McCarthy, as the outline of the law up to 1980 indicates, the period of time during which the TULRA, the 1974 and 1976 Acts, were in force, and particularly the period between the introduction of the 1976 Act and the coming into force of our own 1980 Act, was the only period since unfair dismissal law was first introduced when employees have been able to be dismissed without remedy for non-membership of a union in a closed shop, despite their having conscientious objections to union membership or despite their being existing non-union employees at the time when the closed shop was introduced.

As the noble Lord, Lord McCarthy, himself appeared to acknowledge, the period of the TULRA stands out as even more startling against the back-ground of the fact that before 1971 the law had nothing to say about the fairness of closed shop or any other dismissals, and thus it can be inferred that there was no public policy on the issue before 1971. But the 1974 and 1976 legislation created a sutiation in which, after the 1976 amendments, closed shop dismissals were specifically stated to be fair, save only in the case of religious objections to union membership.

This answers a point made by the noble Lord, Lord Hatch. It was therefore the only period in modern times when public policy positively facilitated the dismissal from closed shops, without any remedy, of conscientious objectors to union membership and existing non-union employees. That is the main motivation for our attempts to repeal the law.

The noble Earl really cannot have that because in 1906 the definition of a trade dispute
721
clearly included what we now call a union membership agreement. The Government at that time decided as a matter of public policy that there would by no redress at civil law in cases of closed shops.

The Earl of Gowrie

The noble Lord will be well aware that we went over this ground in detail together in Committee during the passage of the 1980 Act. Without getting into an argument about the nature of the 1906 legislation—and it is not open and shut; it has been subject to considerable dispute over the years—I think we would all acknowledge that the Asquith Government passed that legislation to deal with a set of circumstances which has changed. The situation has changed over the years and Lord McCarthy, or even I myself, might have little enough employment if there had not been development in industrial relations law during all this time.

Our view is that the legislation of 1974 and 1976 was morally indefensible. That view was not restricted to the Conservative Party, as the noble Lord, Lord Hatch, appeared to imply. It was very widely held and can be seen from all tests of opinion in the country and was indeed shared by the Liberals and the new opposition parties. The TULRA legislation had the effect of denying basic individual freedoms and grounds of conscience I mentioned earlier. It had the effect of enabling there to be imposed on existing employees who had freely chosen to work for an employer on a given set of terms and conditions of employment, a wholly new condition of employment, with which they either had to comply of lose their jobs, despite the fact that they might have served that employer loyally for most of their working lives. We acted as quickly as possible after taking office to repeal those unjust laws. We did that in the Employment Act 1980.

The provisions of this clause and schedule reflect the sad fact that that repeal was not in itself enough to remedy the injustices suffered by individuals under the 1974 and 1976 legislation. That is why this Bill contains provision to compensate existing empolyees and employees with conscientious objections to union membership who were dismissed from closed shops without remedy under that previous legislation.

Why then, did we feel that we needed to take a step further? It was certainly our view that the indefensibility of the 1974 and 1976 legislation has been very heavily reinforced by the decision of the European Court of Human Rights in the British Rail case. But I want to emphasise that the court's judgment is not the reason that Clause 1 and Schedule 1 are in the Bill. The Government introduced the provisions because we have always believed that the legislation I mentioned was unjust and because we believe that individuals who suffered should be compensated. But I must say very firmly that the European Court's ruling, which clearly established that the previous Government's legislation was in violation of the Convention on Human Rights, is only a vindication of our own position on the issue. Again, it could not faintly be held to be an internal Conservative party matter.

I was very interested to note that a few moments ago during his speech the noble Lord, Lord McCarthy, appeared wholly to accept the legitimacy of the European Court ruling, and I hope that acceptance will be
722
shared by other members of his party in another place. Certainly when we have tried in another place to draw them as to their view on whether they would try to change the position again, they have always declined to answer.

As the Committee may recall, when I was an employment Minister I played some part in guiding the Employment Act 1980 through your Lordships' House, and that Act restored the minimum safeguards for individual freedoms in a closed shop, which in our view should never have been absent. But the reason that we have felt it necessary to go further now is that our reform in 1980 was seen not to have been fully effective. Within six months of the legislation reaching the statute book two local authorities, Sandwell and Walsall, defied the law and sacked some of their own employees in violation of the rights conferred on them by the 1980 Act. In addition, one of the councils, Sandwell, totally ignored a ballot in which the vast majority of its employees demanded that the closed shop be brought to an end. That is why we have taken this next step and why the Bill extends the protection that the 1980 Act provided against the tyranny of the closed shop.

It extends the protection in two ways. The Bill increases compensation to deterrent levels—and here I come back to the point made by the noble Lord, Lord Howie of Troon. I make no bones about it, nor do I make any apology that there is a strong element of deterrence in the levels of compensation. I hope that those who oppose the closed shop, but are ready to argue that the new levels of compensation are too high, will remember that. We have seen how ruthlessly the closed shop can be abused, and therefore we must not flinch from measures that are needed to bring abuses to an end.

The second main safeguard which the present Bill introduces is to review ballots for existing closed shops, and we shall be coming to that matter. For the moment I can only ask the Committee, how can it be wrong to ask people whether they want to go on working in a closed shop, or how can it be bad for industrial relations to let working people decide these matters for themselves? As I have said, these arguments lie ahead of us, but for the present we believe that some redress must be provided for those individuals who have already suffered specific, and gross injustice at the hands of previous law, including injustice suffered during the period of time in which our own legislation was in operation. That is what Clause 1 and Schedule 1 seek to provide. They are not retrospective legislation. As my noble friend Lord Ferrers said, they provide retrospective justice for individuals. They go some way—not the whole way—towards restoring a wrong that was done, and I commend the schedule to the Committee.

Before the noble Earl sits down, will he please answer the question which both the noble Lord, Lord Howie of Troon, and I asked him? Why is there a difference in compensation between unfair dismissal on the grounds that we have been considering and other forms of unfair dismissal Is that not an invitation to members of unions to leave their unions?

I do not want to detain the Committee. The noble Earl has started talking about Clauses 3, 4 and 5, but we shall go on to do that after dinner. On the single point about the 1906 Act, I would refer to the provisions of Section 29 of the Trade Union and Labour Relations Act 1974 so far as the closed shop is concerned. Subsection (1)(b), which refers to engagement or non-engagement is fundamentally the same as the provisions relating to the definition of a trade dispute in the Trade Disputes Act 1906. That Act, not the Trade Union and Labour Relations Act 1974, removed the threat of civil conspiracy from the prosecution of a closed shop. That was an act of public policy, and it was decided all those years ago. I do not suggest that this is class legislation. Trade unionists are in all classes. This is anti-trade union legislation, and we oppose it.

This seems an appropriate moment for your Lordships to move on to other business, but before moving that the House be resumed I should tell your Lordships that it has been agreed through the usual channels that we shall not be continuing with our current business, the Employment Bill, until 8.20. I beg to move that the House do now resume.